Thailand's Land Bridge Parallels Mexico's Interoceanic Corridor

Both countries have an opportunity to alleviate shipping chokepoints while boosting their own economies and geopolitical standing.

In 2021, the Japanese firm’s vessel, the Ever Given, became lodged in the Suez Canal blocking it for seven days and disrupting the narrow waterway which carries 12% of global trade. The public received a crash course in shipping logistics and they learned something the experts already knew, that the world’s shipping lanes are congested and vulnerable and becoming more so by the day.

The eight shipping chokepoints (i.e., canals, straits) are getting worse because shipping lanes are busier, upgrades to existing chokepoints slow to occur, with new passageways mostly failing to go beyond the planning stage. According to the Economist, in 2010, 8.4 billion tonnes of cargo travelled by sea. By 2019, this had grown to 11.1 billion tonnes. In 2000, 42% of global grain exports passed through at least one maritime chokepoint, according to Chatham House, a think-tank. By 2015, the figure had risen to 55%.

Interesting to emerging market real estate investors is that two of the world’s eight chokepoints can be eased through the creation of land bridges in Mexico and Thailand. The two land bridges traverse narrow portions of the respective countries and are nearby the Panama Canal and Strait of Malacca chokepoints, respectively.

Emerging Real Estate Digest has previously written about Mexico’s Interoceanic Corridor, let’s now take a look at Thailand’s.

Thailand’s Land Bridge

Thailand’s proposed land bridge seeks to take advantage of congestion at the Strait of Malacca chokepoint, presently the shortest sea route to move goods from the Persian Gulf to Asian Markets. The 550-mile long strait runs past Indonesia, Malaysia and Singapore and at its narrowest point is only 1.5 miles wide. Roughly a quarter, or 15 million barrels per day, of all oil transported by sea passes through this strait. It transports 80% of China’s oil from sea shipments.

Thailand’s land bridge would bypass the congested Strait of Malacca by establishing two deep sea ports and linking them with 90 kilometers (i.e., 55 miles) of rail, road and oil pipeline networks. Shippers using the land bridge could expect to shorten shipping times by at least two days. Thai authorities estimate the project would boost annual GDP growth by one to two percentage points annually.

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