Thailand’s export volume impacted as freight costs rise 30%

Thailand’s export competitiveness is weakening as global freight costs surge 30%, raising concerns over trade and consumer prices, a shipping industry leader said.

While the United States and Iran have reached a two-week ceasefire, ongoing uncertainty continues to disrupt shipping routes and supply chains.

Robin Loh, Chairman of the Singapore-Thai Chamber of Commerce and Country Director of Dawn Shipping, warned that end consumers would ultimately face higher retail prices.

“Thailand is facing risks and uncertainty due to high freight costs, disrupted shipping routes and energy volatility, all of which are weakening export competitiveness. Logistics costs will rise and trade flows will slow further. Eventually, consumers will have to absorb these additional costs,” he said.

Taking food exports as an example, export volumes fell by 10.5% in the first two months of 2026, according to the Federation of Thai Industries and the Thai Chamber of Commerce.

To bolster Thailand’s export sector, he suggested that the government needs to streamline processes at customs, ports and in permit issuance, noting that complex regulations have undermined the country’s competitiveness in the region.

Artificial intelligence and digitalisation are also increasingly important, he added, pointing to Singapore’s transformation of its export-import systems through technology-driven efficiency.

“The Thai government could look at how neighbouring countries are adapting and adopt best practices. In global trade and during periods of crisis, countries that provide efficiency through new technology will be best positioned to deliver for their people,” he said.

While the Strait of Hormuz remains partially open to international vessels, another key chokepoint, the Strait of Bab el-Mandeb, connecting the Red Sea to the Indian Ocean, faces potential disruption.

Robin explained that vessels travelling from Europe to Asia may need to reroute via the Cape of Good Hope if both straits were fully closed, significantly increasing costs.

“Vessels would need an additional 12 to 14 days to reach their destinations, with speeds reduced by around 30%,” he said.

With roughly 30% of global cargo passing through the Suez Canal and the Strait of Bab el-Mandeb, he added that further increases in logistics costs and delivery delays would push retail prices higher.

However, he noted that shipping costs remain relatively stable for now, as Red Sea routes are still operational, with the Middle East region currently the most affected.

According to Drewry’s World Container Index, freight rates between Asia and Europe have softened despite ongoing tensions. Rates from Shanghai to Genoa fell by 3% to $3,420, while Shanghai to Rotterdam dropped by 9% to $2,308 for for 40-foot containers (FEU).