A groundbreaking canal project in Cambodia is set to transform regional logistics by facilitating increased cargo flow to Thailand’s Laem Chabang Port, a key hub in the eastern logistics network. The proposed Funan Techo Canal aims to elevate the efficiency of supply chains across the region.
Stretching 180 kilometers, the canal will create a vital link between Phnom Penh and the Gulf of Thailand, significantly improving Cambodia’s access to global trade routes. With an investment of $1.7 billion, construction is scheduled to start next month, and the canal is expected to be operational by early 2028. This development promises to reduce Cambodia’s dependence on Vietnamese ports, thereby enhancing its regional logistics capabilities.
The expansion at Laem Chabang Port is already underway, aiming to increase its annual capacity from 11 million to 18 million TEUs (twenty-foot equivalent units). The new canal is anticipated to further boost traffic to this crucial port, which will support a broader range of logistics operations. The increase in cargo volume is expected to drive demand for Thailand’s ambitious Land Bridge project, which involves creating deep-sea ports in Chumphon and Ranong provinces. This project is designed to streamline shipping routes, alleviate congestion in the Malacca Straits, and shorten transit times from 9 days to 5.
Experts from the Thailand Development Research Institute (TDRI) believe that while the canal will be operational by 2028, it may take Cambodia some time to fully develop its logistics infrastructure. The TDRI points out that Thailand’s own Laem Chabang Port also took about a decade to reach its current level of capacity, thanks to support from the Eastern Economic Corridor (EEC).
Once completed, the Funan Techo Canal is expected to cut Cambodia’s logistics costs by up to 30% and foster stronger regional trade connections, making supply chains more efficient and effective.
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