Cambodia's Ambitious Vision to Become a Regional Trade Hub by 2030

Cambodia, a nation with a rich history and vibrant culture, is setting its sights on a new kind of future—one that positions it as a regional trade hub in Southeast Asia by 2030. With bold infrastructure investments and comprehensive policy reforms, the Kingdom is working to unlock the full potential of its trade corridors, improve connectivity, and streamline logistics. In doing so, Cambodia aims to double its trade volumes and strengthen its position as a key player in the global supply chain.

A Growing Trade Landscape

Cambodia's trade volume has surged in recent years. From January to September 2023, the country’s total trade reached a staggering $40.94 billion, a figure that highlights the increasing importance of Cambodia in the regional and global economy. However, despite these gains, Cambodia faces significant logistical challenges. According to the World Bank’s 2023 Logistics Performance Index, Cambodia ranks 115th out of 138 countries, signaling inefficiencies in customs clearance, infrastructure, and logistics quality.

To address these challenges, the Cambodian government has launched the Comprehensive Intermodal Transport and Logistics System (CITLS) Master Plan 2023–2033, which outlines $30 billion in priority investments to modernize the country's infrastructure. These projects focus on upgrading roads, railways, inland waterways, and logistics hubs, with the aim of boosting Cambodia’s competitiveness in export-oriented sectors like textiles, agriculture, and light manufacturing.

Key Trade Corridors: The Heart of Cambodia’s Vision

The World Bank has identified three critical trade corridors that are central to Cambodia’s economic future. These corridors are essential for addressing logistical bottlenecks and reducing transportation costs, both of which are key obstacles to the country’s trade competitiveness.

1. East-West Road Corridor

Connecting Cambodia with Thailand, Vietnam, and Laos, the East-West Road Corridor is a vital artery for the Greater Mekong Subregion (GMS). A crucial section of this corridor, the 400-kilometer Siem Reap-Oyadav Road, requires significant upgrades to facilitate smoother trade flow between the nations. This route is part of the Asian Highway Network and a priority under the Master Plan on ASEAN Connectivity (MPAC) 2025.

Improving the Siem Reap-Oyadav Road is seen as a key step in enhancing Cambodia’s regional trade links and unlocking economic potential in its underdeveloped northeastern provinces. According to reports, road connectivity is the backbone of Cambodia’s trade, and enhancing this corridor could substantially reduce transport costs while fostering greater regional economic integration.

2. Inland Waterway Corridor

Cambodia’s Inland Waterway Corridor takes advantage of the Mekong River to connect Phnom Penh with the Cai Mep port in Vietnam, a gateway to international markets in North America and East Asia. Currently, waterways account for 26% of Cambodia’s containerized trade, but the potential for expansion is enormous.

The Phnom Penh Autonomous Port.

Transport ministry

The Phnom Penh Autonomous Port (PPAP) has plans to double its container-handling capacity by 2029, and further improvements are in the pipeline. These include modernizing feeder ports in provinces like Kampong Cham and PrekKdam, dredging navigation channels, and enhancing safety measures. Streamlining cross-border procedures, especially with Vietnam, is also critical for maximizing the potential of this corridor.

3. Rail Corridor

Cambodia’s Rail Corridor, which spans Poipet, Phnom Penh, and Sihanoukville Port, is underutilized, handling less than 1% of domestic freight. However, with trade volumes expected to double by 2030, the Cambodian government has committed to revitalizing the country’s rail infrastructure. This includes renovating the existing meter-gauge railways, acquiring modern rolling stock, and upgrading digital signaling systems.

Kampot Railway Station

Investing in rail transport has multiple benefits. Rail is a more cost-effective and environmentally friendly mode of transportation compared to road freight, aligning with Cambodia's sustainability goals. Furthermore, rail can help shift freight from congested roads, reducing traffic and lowering greenhouse gas emissions.

The rail corridor is also seen as a critical part of Cambodia’s decarbonization efforts. Rail transport produces far fewer greenhouse gas emissions than road freight, which is essential as the country works to meet its climate commitments.

Tackling Infrastructure Challenges

While Cambodia's infrastructure improvements are promising, there are significant hurdles that must be overcome. One of the most pressing issues is the country's aging logistics fleet. With an average truck age of 20 years, the current fleet is inefficient, contributing to higher fuel consumption, increased maintenance costs, and slower transit times. These inefficiencies raise logistics costs, which account for approximately 26% of Cambodia’s GDP—substantially higher than in neighboring Thailand and Vietnam.

In addition, although 85% of national roads are paved, only 10% of rural roads are sealed, leaving many agricultural and industrial areas poorly connected to major markets. This lack of infrastructure drives up transport costs and limits the ability of rural communities to access key markets.

The underutilization of railways also poses a challenge, as does the capacity constraint on inland waterways. While Cambodia has immense potential in both areas, outdated infrastructure, underused facilities, and inefficient customs procedures continue to hinder growth.

A Comprehensive Approach to Growth

Cambodia’s path to becoming a regional trade hub hinges on the successful integration of these key transport corridors. The government's strategic investments aim to create a multi-modal logistics network where roads, waterways, and railways complement each other. Roads provide rapid transport for perishable goods, inland waterways offer low-cost bulk transport, and rail offers a sustainable solution for heavy freight.

World Bank Country Manager for Cambodia, Tania Meyer, emphasizes the importance of a comprehensive approach to transport network development. “By strengthening infrastructure, improving connectivity, and streamlining processes, Cambodia can unlock its export potential and increase its competitiveness in the region,” she said.

Looking Ahead: A Vision for 2030

Cambodia’s bold vision for 2030 is grounded in its commitment to improving trade efficiency, regional integration, and sustainability. With major infrastructure projects underway, the Kingdom is well-positioned to transform its logistics sector into one that supports a thriving export economy, enhances its connectivity with Southeast Asia and beyond, and positions Cambodia as a key player in global supply chains.

As Cambodia accelerates its infrastructure development and policy reforms, the country’s potential as a regional trade hub is within reach. The next decade will be crucial in determining how well Cambodia capitalizes on these opportunities—and whether it can achieve its ambitious goal of becoming one of Southeast Asia’s leading trade destinations by 2030.

By embracing modernization, overcoming infrastructure challenges, and fostering collaboration across sectors, Cambodia is on track to play an increasingly influential role in global trade for years to come.