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25 Jun 2020


‘New Normal’ to pose challenges for Thai cross-border food logistics businesses until COVID-19 risk dissipates (Current Issue No.3121)


Border trade is an important product distribution channel for Thailand to neighboring countries (Myanmar, Lao PDR, Cambodia, Malaysia, Singapore, Vietnam and southern China). Border trade shipments  represent 30 percent of Thailand's total export value from all cross-border channels combined. During periods of intense COVID-19 transmission, each country has issued measures to counter the outbreaks, which in turn have affected outbound shipments and caused cross-border exports during the first four months of 2020 to contract by 10.6 percent YoY, with an export value of THB 209.23 billion. Shipments of consumables like fresh food, vegetables and fruits have been severely affected, with a contraction  of as high as 38.1 percent (YoY) whereas processed foods, which have more flexibility in terms of transport options, have been able to expand by 2.0 percent YoY. Nonetheless, COVID-19 may represent a turning point, as businesses which are related to border and cross-border trade  require effective operations management amid continuously dwindling export revenue which is not expected to improve for the remainder of the year. KResearch projects that outbound shipments along and across the Thai border for 2020 will shrink by 12.8 percent (YoY), with a more positive outlook in 2021, thanks to this year's low base effect in exports and the anticipated economic recovery among neighboring countries.


While the COVID-19 situation has consistently improved domestically, certain measures continue to produce unfavorable outcomes, particularly cross-border shipments via Lao PDR, where entry of foreign vehicles and international drivers remains prohibited. In fact, some measures may become more widely adopted in the future – which will have an impact on Thai food logistics businesses and thereby influence them to make preparations for a 'New Normal' that will be around for the foreseeable future.​