[KUALA LUMPUR] Malaysia is staking RM370 million (S$113.6 million) on a multimodal logistics hub in Perlis near the Thai border to capture long-haul freight, ranging from rubber to semiconductor chips.
As the country boosts its ability to ride the broader recalibration of regional supply chains, it is also hoping that rail shipments from the hub will outpace those by sea.
The Perlis Inland Port (PIP) is slated to begin partial commercial operations in November. It is targeted at cutting the Chongqing-Malaysia transit from about 13 days to under a week, to capture higher-value cargo.
Mutiara Perlis group chief strategy officer Abbas Hyder Bilgrami said PIP is “designed as a multimodal hub – connected by both road and rail all the way to China”. The goal, he added, is for it to become the Asean hub for Singaporean, Thai and Malaysian cargoes.
Mutiara Perlis is the parent company of Inland Port Perlis, which owns and operates PIP.
“Time and cost are always the two factors in logistics,” said Abbas, noting that rail operator Keretapi Tanah Melayu Bhd’s (KTMB) Asean Express pilot last year showed that cargo could move from Kuala Lumpur to Chongqing in nine days by train, compared with 14 by sea.
“We now know that can be cut to under seven,” he told The Business Times in an interview.
Located 4.7 km from the Malaysia-Thailand border, PIP is designed to handle 300,000 twenty-foot equivalent units a year – double the capacity of the existing Padang Besar Container Terminal (PBCT). The new facility will begin full operations with automated signalling in January 2026, when PBCT is decommissioned.
Its formal inauguration is slated for Feb 10, 2026, by Tuanku Syed Sirajuddin, the raja of Perlis, in conjunction with the silver jubilee of his accession.
Malaysia has inland ports in Ipoh, Nilai, Segamat, Padang Besar and Tebedu, which mainly support domestic flows and border clearance. PIP, by contrast, is being developed to capture cross-border trade.
Transport Minister Anthony Loke has pitched PIP, which involves a 5 km bonded road, and a 1 km rail spur line, as part of a wider plan to strengthen Malaysia’s transport backbone.
In March 2025, the government sealed an operation and maintenance pact between KTMB and Inland Port Perlis.
Beyond a relief valve
PBCT has been running at nearly full capacity, with throughput up 21 per cent in 2024, Abbas said, as cargo from southern Thailand streamed across the border.
Officials expect PIP to relieve the crunch, and also act as a catalyst for the Chuping Valley Industrial Area – a manufacturing zone in Perlis of about 970 hectares that is aimed at green, halal and high-tech industries.
Still, the PIP project faces execution risks.
While the construction of the bonded road and rail spur is complete, the certification for the signalling facility must still land on time to allow PBCT’s decommissioning in January. This is now expected to be given by end-2025.
Regional bottlenecks are harder to solve.
“From Padang Besar to Bangkok the route is not yet fully double-tracked, so freight still competes with passenger trains,” Abbas noted. “That’s one of the major barriers we hope Thailand will solve in the next few years.”
Analysts say PIP’s launch is also part of a broader recalibration of regional supply chains.
“For Malaysia, this could mean anchoring its role in both Asean and China-focused logistics networks,” said Dr Ruth Banomyong, professor of supply chain and logistics at Thammasat University in Thailand.
“Rail will never replace road transport, but there is potential for modal shifts, especially for higher-value goods if the cross-border environment is reliable.”
He added that customs and digital integration are as vital as physical infrastructure. “Infrastructure is the hardware of the system. Customs and digital integration are the software that facilitate the efficient and effective use of that infrastructure.”
The project also sits within a wider China-Asean connectivity push under Beijing’s Belt and Road Initiative.
With Thailand upgrading its north-south railway lines and Malaysia’s East Coast Rail Link project progressing towards its 2026 completion target, PIP could form part of the southern gateway in this emerging trans-Asia land bridge – provided that border harmonisation and the promised digital backbone keep pace.
“PIP is part of a network of dry ports supporting connectivity in the United Nations Economic and Social Commission for Asia and the Pacific region,” Dr Ruth said. “How successful it will be depends on its value proposition: cost, time and reliability when offering its services.”
Digital gaps
Yet, even with stronger policy support, experts caution that infrastructure alone will not make the railway a reliable competitor to roads when it comes to moving freight.
Jonathan Koh, managing director of Singapore-based consultancy Trade Facilitation, said: “Rail cargo faces frequent delays due to bottlenecks at border crossings, customs procedures and inconsistent infrastructure quality across countries, often resulting in longer, unpredictable transit times compared to road freight.”
The most critical deficiency, he added, is digital data interoperability. “Systems are fragmented across borders, with no common usage of interoperable electronic rail consignment and customs documents, and limited integration with national single windows. The lack of seamless data exchange remains the biggest barrier to competitiveness.”
Koh suggested that Singapore could offer its experience in digital trade platforms, such as TradeTrust, to help the corridor pilot interoperable data exchange and drive investment in regional digital trade harmonisation.
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