Southeast Asia investing heavily in ports to boost economic growth

Booming trade and economic growth mean that many of Southeast Asia’s ports face potential gridlock. Countries across the region are thus unveiling massive new investment in new ports and upgrades. Adrian Ashurst, CEO of Worldbox Intelligence, investigates how countries across the region are implementing ambitious port projects that should boost exports and economic growth overall.

Ports around the world suffered from significant congestion in 2024. Around 68% of 88 analysed ports globally, recorded longer average vessel anchor times in 2024 compared to 2023, according to the researcher Beacon (1). Attacks on shipping in the Red Sea by Houthis rebels, port strikes and a series of extreme weather events contributed to the disruption. Southeast Asia, whose ports accounted for nearly a quarter of the capacity experiencing delayed berthing slots worldwide, was a particular congestion hotspot.

Artificial intelligence boosting efficiency

Governments in the region are responding by investing heavily in new port facilities and upgrading existing infrastructure to ensure bottlenecks don’t threaten economic and trade growth in the future. Expanding capacity doesn’t just mean pouring concrete to build new docks, the authorities are also focused on adapting the latest technology including artificial intelligence (AI) to create “smart” ports.

New technologies exploiting advances in AI are already positively impacting global supply chains. Indeed, some of the biggest ports in the world—including Los Angeles, Rotterdam, and Singapore—are using AI to streamline cargo transfers, vessel scheduling, and other procedures.

Singapore, home to the world’s second-busiest container port after Shanghai, is leading the AI charge. Perhaps most dramatically, the authorities intend to trial a dynamic real-time virtual model of the Port of Singapore, powered by artificial intelligence (AI), in the second half of 2025. This digital twin, according to the port authority, will improve navigational safety, operational efficiency and environmental sustainability (2).

Singapore, whose activities were badly affected by the congestion in 2024, is also investing heavily in upgrading its capacity with the construction of the Tuas megaport. By 2040, when all the phases are completed, Singapore will have the largest port in the world, as well as one of the most technologically advanced. Total investment in the project will amount to around US$15 billion.

Vietnam’s modernisation plans

Vietnam is also spending heavily on its ports. In February, the Hateco Hai Phong International Container Port, the country's newest and most advanced deep-water port, officially commenced operations. HHIT covers an area of 73 hectares and features a 900-meter-long wharf that can accommodate two large container vessels with lengths of up to 400 meters simultaneously (3).The country is also planning to spend US$13.76 billion upgrading its entire port system by 2030.

Currently, many of Vietnam’s ports suffer from outdated infrastructure that contributes to congestion and raises transport costs, hindering the country’s long-term growth targets. Combined with investment in road and rail transport, upgrading the port system should significantly boost the country’s export and growth potential. (4)

Malaysia aims to become a logistics hub for the region

Malaysian plans to increase port capacity are focused on the construction of a new port designed to significantly boost the handling capacity for both container and conventional cargo at the country’s main shipping hub of Port Klang, near Kuala Lumpur. The port is designed to enhance Malaysia’s ability to compete as a logistics hub against the likes of Singapore, Thailand and Vietnam (5). Total investment is estimated at over US$6 billion.

Malaysia is also building a container terminal at Port Dickson on the western coast of the Malay peninsula, facing the Malacca Strait, one of the world's busiest sea lanes. The facility, which will feature a 1.8-kilometre jetty, a terminal, and a container operation area spans approximately 809,300 square metres.

Planners hope the project will attract more shipping traffic and logistics operations to Malaysia, particularly as companies seek to diversify their supply chains and reduce dependence on China. It could also result in the establishment of new manufacturing bases, and the development of distribution centres in the country. The port, which will cost over US$400 million to construct will be the first in Malaysia to employ AI to enhance operational efficiency. (6)

Thailand’s revolutionary ambitions

Thailand has extremely ambitious plans in this area too. It is planning to invest around US$36 billion on a land bridge, connecting the Andaman Sea and Gulf of Thailand. The land bridge, connected by an 87-kilometre highway and railway, would aim to bypass the Malacca Strait and could revolutionise trade routes and propel the economy forward.

The project is the centre piece of a new special economic zone, the Southern Economic Corridor (SEC), that aims to power Thailand to high-income status by 2030. It calls for the construction of two new ports, one at Ranong on the Andaman Sea and the other at Chumphon, on the Gulf of Thailand.

Source: https://issuu.com/thaitch/docs/nov_2021/s/14215200

Combined the two ports will be able to handle around 24 million twenty-foot equivalent container units. The project holds the potential to transform the country into a pivotal logistics hub, providing an alternative to the Malacca Strait and enhancing regional connectivity.

There are some doubts, however, about whether the land bridge will come to fruition. While the bridge promises to cut shipping journey times between the India and Pacific oceans by around 4 days, cargoes would have to be offloaded at one of the new ports and transported to the other. Ensuring that empty ships would be available at the port where the cargoes are reloaded and ensuring those cargoes arrive on time could prove challenging.

There are also concerns about the environmental impact of the project, which would require extensive land clearance and deforestation and the destruction of sensitive ecosystems including mangroves and evergreen forests. Nonetheless, if the land bridge proceeds, it would position Thailand as a crucial transshipment hub in Southeast Asia and enhance transport links with neighbouring countries.

The government certainly show no sign of curbing its enthusiasm for the project. In March 2025, Transport Minister Suriya Jungrungreangkit confirmed that the plan is still being pursued, and that China and Middle Eastern countries are showing an interest. The administration expects to present a bill to establish the SEC to the cabinet for approval in May before it is forwarded to parliament.

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