ASIA

Busan rewards transhipment loyalty

21 years ago

Busan Port Authority is to return US$12.14m to 52 shipping lines as a reward for moving at least 3% more transhipment cargo through the port in 2004. This is a significant rise on the US$8.35m the port returned in 2003. The incentive programme, along with the policy of cutting port fees, essentially aims to boost the amount of cargo being shipped through this regional hub. In 2004, transhipment traffic amounted to 42.1% of the 11.4m containers that the port handled, itself an increase of 11% over 2003.

In respect of Chinese and Japanese transhipment traffic, the policy is definitely working.

In 2004, Busan/Chinese transhipment grew 7.9%, while Japanese/Busan trade was up 23%. Ironically, congestion at US west coast ports also had the effect of boosting transhipment business, since major lines thought it prudent to miss out calls at key Chinese export ports such as Ningbo, Tianjin and Dalian in order to make up time, forcing exporters to feeder boxes from those ports into Busan.

The main beneficiaries of Busan’s incentive policy are Hanjin Shipping, whose rebate rose 31%, and South Korea’s other main shipping line, Hyundai Merchant Marine who won back 67% more. At the same time, Maersk and P&O Nedlloyd each received a sevenfold rebate increase.