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Malaysia’s Perlis port promises faster halal deliveries to China, but success hinges on Thailand

From SCMP | March 25, 2025

Malaysia’s Perlis mega-port aims to revolutionise halal cargo delivery to China, contingent on Thai rail agreements and regional stability

Malaysia is building an inland mega-port in its northernmost-state of Perlis to boost goods train capacity to the western Chinese cities of Kunming and Chongqing – potentially reducing delivery times by up to 50 per cent – but the project’s success hinges on delicate negotiations with neighbouring Thailand.

Developers of the 492 million ringgit (US$111.8 million) Perlis Inland Port expect the project’s first phase to be completed by July. This expansion will double the state’s current capacity to 300,000 shipping containers, improving the handling of rising shipments from Thailand’s southern provinces.

Malaysia sees expanded capacity as an opportunity to increase cargo delivery – especially of halal products – to China, with trains expected to reach Chongqing from Perlis in eight days.

Government estimates say that would significantly cut sea transit times from Port Klang, further south, which typically range between 14 and 21 days.

But Malaysia’s plans are contingent on Thailand agreeing to ease customs clearance and pursue a policy to develop its restive south – the last rail segment blocking an ambitious Pan-Asian high-speed railway.

“Right now it is not so simple because there are still a lot of permutations. We still have to cross at least two countries before we reach China,” Malaysian Transport Minister Anthony Loke said on Monday during a site visit to the port, referring to Thailand and Laos.

The concept of an inland port may also be influenced by Thailand’s initiative to construct a “Landbridge” across its southern neck, linking the Gulf of Thailand with the Andaman Sea, several hundred kilometres before the Malaysian border.

It is unclear how the new deep seaports, intended to reduce transit times just north of Malaysia, will affect plans for Perlis.

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Transport Minister Anthony Loke listens to a briefing on progress of construction work at the Perlis Inland Port. Photo: Joseph Sipalan

Slow train to Chongqing

Malaysia currently runs a twice-weekly Asean Express rail cargo service from Kuala Lumpur to Chongqing, delivering 40 containers of electronics in about nine days.

It uses the western rail line that runs through the western border between Perlis and Thailand’s Songkhla province. However, launching a direct service from Perlis would require collaboration with Thai authorities, Loke said.

“We must have an understanding at the [government-to-government] level in terms of policies, affirmation, trade and customs facilitation,” he added.

The minister said he consulted the governor of the State Railway of Thailand and would follow up with the transport minister during his trip to Bangkok next month.

Malaysia’s ambitious rail plans also face a significant challenge from a bloody 20-year rebellion by Malay-Muslim insurgents in Thailand’s southern provinces seeking autonomy.

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Thai Explosive Ordnance Disposal members and police officers inspect and secure a bomb blast scene next to the wreckage of a vehicle in Narathiwat province, in September 2015. Photo: EPA

The insurgency, which has killed more than 7,500 people, has stymied development in the southern provinces of Narathiwat, Yala and Pattani, whose majority-Muslim population were forced to assimilate after Thailand colonised the region over a century ago.

Public infrastructure, including the sole rail line linking southern and northern Thailand, is frequently targeted by insurgents. Recently, two attacks resulted in five deaths and about a dozen injuries.

Southern Thailand is the only stretch of rail that has yet to have any clear plan for high-speed connectivity.

Bangkok already has a daily – albeit slow – direct link to Vientiane, Laos, which in turn runs a high-speed train to Kunming once a day.

Last year, Malaysia proposed transforming a defunct rail link in Rantau Panjang in Kelantan state, along Thailand’s eastern border, into a key border crossing linking the 50 billion ringgit (US$16.7 billion) China-built East Coast Rail Line along the peninsula’s east coast.

“This is an area where there is big demand for halal products”. Anthony Loke, Malaysia’s transport minister

Loke, however, is optimistic that the new Perlis container port will be able to spur direct trade between Malaysia and Kunming and Chongqing.

“This is an area where there is big demand for halal products,” the minister said. “If we can enable rail movement, we hope this can create demand for rail cargo, especially in the western part of China which is far away from their major ports.”

Malaysia wants to expand its domestic halal industry from food to Islamic banking, capitalising on its clout as a global leader in halal standards, to get a slice of an estimated US$3 trillion market, particularly in countries with large Muslim minorities like China and India.

The government plans for the port to be a launch pad for the halal industry in Kunming and Chongqing. In the second development phase, it aims to double its capacity to 600,000 shipping containers and eventually reach 1 million annually.

Malaysia has invested 327 million ringgit (US$74.3 million) in infrastructure, including a 5km road for freight trucks from Thailand and a 1.7km spur line connecting the port to the country’s western rail line in Padang Besar.

The government estimates the domestic halal industry could be worth over US$113 billion by 2030.

Source:

Sipalan, J. (2025)Malaysia’s Perlis port promises faster halal deliveries to China, but success hinges on Thailand. South China Morning Post. https://www.scmp.com/week-asia/economics/article/3303796/malaysias-perlis-port-promises-faster-halal-deliveries-china-success-hinges-thailand

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