By Sherine Chen    Photo：CANVA

Southeast Asia is a region where countries are very close to each other. This proximity has fostered strong cross-border trade throughout the region. Thailand, strategically located in the heart of Southeast Asia, serves as a pivotal hub and is a key player in this trade. The Thai government separates cross-border trade into two categories: transshipment and transit. Goods often pass through Thailand on their way to other countries, making it important to understand how transit and transshipment work here.

Transshipment

Transshipment involves unloading items from one mode of transportation (such as a ship) that enters Thailand and then transferring them to another mode of transportation (such as a truck, train, or another vessel) for export. This transfer process must happen at the port of arrival and under the control of the same customs house. The offloaded cargo might be temporarily stored in a warehouse before being exported to the final destination and must be exported outside Thailand within 30 days from the date the shipment is imported into the country. The shipment both begins and terminates outside the country, with the goods not being used domestically. For instance, goods might arrive at Laem Chabang port from the U.S.A., be stored temporarily in a warehouse, then reloaded onto trucks, and go through customs clearance at Laem Chabang port (under one customs house) for final delivery to Cambodia.

Transit

Transit means the transportation of goods through Thailand from a customs house of entry to a customs house of exit under customs control, where the shipment also begins and terminates outside the country. While these goods are in Thailand, they must not be used or involved in any activities for making a profit. For example, goods transported from Malaysia to Laos through Thailand without stopping for storage or processing. The transit time takes around 3 days (Thailand-Laos) and 5-7 days (Malaysia-Laos) from the loading to the unloading process at both the origin and destination countries.

Under the Customs Act B.E. 2560 (2017), transit means that any border crossing by land, whether entering or exiting Thailand, must be with a country that shares a land border with Thailand. If there is no agreement with the neighboring country, border clearance will not be possible. Currently, Thailand has two border crossing agreements: the Road Transport Agreement between the Government of the Kingdom of Thailand and the Government of the Lao People’s Democratic Republic, and the Agreement on the Transport of Goods from the East to the West of Peninsular Malaysia and vice versa, crossing the Thai border by the State Railway of Thailand. If the country doesn’t have an agreement with Thailand, they can use GATT 1994 (General Agreement on Tariffs and Trade) Article V Freedom of Transit. 

Both transit and transshipment in Thailand are useful when the origin and destination countries are not directly connected. Therefore, Thailand's cross-border services can facilitate smoother trade between these countries. Make sure to consult with your logistics partner to fully understand all regulations.

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