Thailand’s Export Challenges and Rising Economic Strain

Thailand’s export sector faces mounting pressure from rising freight costs and structural economic challenges, even as regional tensions ease.

Freight costs have surged by 30%, directly impacting Thailand’s export volume and weakening its competitiveness in global markets, according to Robin Loh, Chairman of the Singapore-Thai Chamber of Commerce and Country Director of Dawn Shipping. He warned that continued disruptions to shipping routes, supply chain risks, and energy volatility are increasing logistics expenses and slowing trade flows, with end consumers ultimately bearing the cost through higher retail prices.

Taking food exports as a key example, export volumes fell by 10.5% in the first two months of 2026, based on data from the Federation of Thai Industries and the Thai Chamber of Commerce. This decline reflects broader vulnerabilities in Thailand’s export economy, including overreliance on key markets, limited trade diversification, rising production costs, labor shortages, a strong baht, and insufficient technological innovation — factors previously highlighted by the Thai National Shippers’ Council as six major economic weaknesses threatening export growth.

These challenges come amid a broader economic slowdown, with Thailand’s post–COVID-19 recovery marked by persistently weak growth averaging only 2.3% annually from 2022 to 2024 — well below pre-pandemic levels. Structural weaknesses in labor supply, productivity, fiscal space, household debt, and foreign direct investment patterns are compounding the pressure on the export sector, according to analysis from the Thailand Development Research Institute (TDRI).

Despite a temporary ceasefire between the United States and Iran reducing immediate geopolitical risks to shipping routes, analysts note that underlying uncertainties in global trade and supply chains persist. Loh emphasized that Thailand must modernize its trade infrastructure by streamlining customs, port, and permit processes, and adopting digitalization and artificial intelligence — citing Singapore’s technology-driven transformation as a model for improving efficiency and resilience in export-import systems.

To strengthen its position, Thailand needs a coordinated economic strategy that addresses both immediate logistics bottlenecks and long-term structural gaps in skills, innovation, and market diversification. Without such measures, the country risks falling further behind regional competitors in global trade.