A group of shippers is concerned rising freight rates could potentially impact exports in the second half.
The group plans to propose to the Joint Public and Private Sector Consultative Committee on Commerce, which includes the Thai Chamber of Commerce, the Federation of Thai Industries and the Thai National Shippers' Council (TNSC), that it address the issue of high costs.
Chaichan Chareonsuk, chairman of the TNSC, said Red Sea tensions have resurfaced, leading to a 30-40% increase in freight rates within a month. The TNSC proposes the Commerce Ministry convene a meeting of the committee to find options to cope with this situation, fearing exports may not meet shippers' targets.
Exports posted growth in April, expanding by 6.8% year-on-year, causing the first four months this year to register a gain of 1.4%.
Mr Chaichan said several products performed well in April, including rice, rubber and pet food, as well as industrial products such as automobiles and electronic parts. The weaker baht has also benefited shipments.
Exports to major markets such as the US and India as well as new hubs including Saudi Arabia continue to fare well, he said. In the first half, exports should post growth, said Mr Chaichan.
However, in the second half, risk factors include the economic slowdown of key trading partners, particularly China, as many Thai products are part of the production chain linked to China.
Overall freight rates have increased by 30-40% within a month, which is higher than during the first Red Sea crisis at the end of December 2023, but not as high as during the pandemic, he said.
Freight rates for shipping routes to Europe have risen to US$4,000 per 20-foot container, an increase of 400%. Routes to the US are now $5,000 per 40-foot container, a 200% increase, based on geopolitical issues and China's push to export to the US before the elections.
High freight rates are projected to persist until the end of the year, said Mr Chaichan. Exporters are advised to coordinate with importers regarding deliveries, he said.
"The TNSC requests the Commerce Ministry speed up convening the joint committee to propose that sea freight services be controlled services to establish a reference price for Thailand," said Mr Chaichan.
The council maintains its export growth target for this year at 1-2%. To achieve this, for the remainder of the year Thailand needs to export an average of $24.2 billion per month.
