Despite some cracking throughput figures, a question – not the obvious one – is being posed about Korea\u2019s port stategy.<\/p>\n
First the figures: last year, port container traffic rose 18.3% to 19.3m teu from 16.3m in 2009, according to figures from the Ministry of Land, Transport and Maritime Affairs, a 7.8% increase on 2008\u2019s record high.<\/p>\n
Of this, the lion’s share was import and export cargo, at 12.3m teu with transhipment cargoes recording 6.6m teu. These figures also show sharp growth with import-export up nearly a fifth at 18.9% and transhipment rising by 15.7%.<\/p>\n
Korea\u2019s port strategy is not about to change fundamentally \u2013 too much has been built on an interventionist government strategy for it to be dispensed with. Ports move 99% of Korea\u2019s exports by weight and are not about to see any rug pulled from under them, but some changes are needed to ensure the strategy keeps working as well as it has to date. It also should be borne in mind that Korea is very much a trading economy; ports are its oxygen.<\/p>\n
\u201cThe Korean government will continue to invest its revenue to expand and improve its port facilities,\u201d says Mr Kim Gyu-serb, Deputy Director of the Port Policy Division of the Ministry of Land, Trannsport and Maritime Affairs.<\/p>\n
That Korea has a policy body for its ports embedded in the central government speaks volumes about the depth of strategic thought going on for them. That the annual budget for port construction is $3.3bn with over half coming from the central government shows the strength of its commitment and maybe the need to fine-tune an existing strategy as the sector matures.<\/p>\n
What Korea has successfully done over the years is avoid competition between its national ports with the government determining each port’s working role in terms of its features, strong points and potential. Each port has a niche: Busan does containers, Ulsan chemicals and vehicles, Gwangyang chemicals and steel and containers and Pohang steel, to give a handful of examples.<\/p>\n
\u201cBut the question has been raised that how much money has to be invested to what port. Due to global economic uncertainty, its very difficult to forecast port facility demand, and the uncertainty will continue to rise in the future,\u201d explains Mr Kim of the economic questions challenging the overall strategy.<\/p>\n
Adding to this pressure is Korea\u2019s ambition to be economic focal point of Northeast Asia. Already a major trading economy in its own right Korea is also located on major trunk routes between Asia and North America and within Asia. Its national claim to be a hub is good.<\/p>\n
For ports, this inevitably means Busan. The government is not staking everything on Busan but it does raise the question of how to make the most of what advantages it has within the economic conditions of the times.<\/p>\n
\u201cThe competition for northeast hub port is getting fiercer, so it is necessary for Korean government to make some measures to win that competition with other foreign ports,\u201d says Mr Kim. The initial response seems to be to abandon none while focusing extra hard on some. \u201cA few ports such like (sic) Busan port (containers) and Ulsan port (chemicals) are being nurtured, selectively by a central government,\u201d he adds.<\/p>\n
One challenge to this approach lies within Korea. Already economically developed, its costs are higher than China who is also investing heavily in its ports. In Northeast Asia this means Tianjin which can lay claim to being both state-of-the-art and connected. Its also mega and substantially cheaper.<\/p>\n
As a result it \u201ccaptures considerable cargo originating from the northern markets\u201d, according to Richard A Butcher, group marketing and sales director of consultant IMS UK. In a twist that speaks volumes about Korean ambitions and their achievability, he notes \u201cTianjin has started pulling cargo away from the new facilities of Gwangyang that are found on the Southern peninsular directly opposite”.<\/p>\n
The other question that usually gets asked in this context is the big what if of North Korea.<\/p>\n
South Korea, prosperous and democratic, has long been dogged by its poor, bellicose neighbour. While periodic bouts of tension between the two grab the headlines, they have not succeeded in derailing South Korea\u2019s at-the-double march towards prosperity. However, they could prevent its further development.<\/p>\n
During a recent and short-lived rapprochement, one of the ideas floated was the creation of Iron Silk Road. Under this, goods would move freely across North Korea usually via rail although some had hopes of road links as well. Such a scheme would have effectively connected South Korea to the Eurasian land mass and all its markets by land.<\/p>\n
Busan, now the key for Korea, and maybe Northeast Asia, could have been connected, by land as well as sea, to so much more.<\/p>\n
However, the Iron Silk Road is now in abeyance and as Mr Kim says, \u201cfurther action can\u2019t be taken before unification is discussed seriously between (the) two Koreas”. That is still some way off. The North\u2019s only victory might be to block the Iron Silk Road and the full connection of Korea and its ports to the rest of the world.<\/p>\n","protected":false},"excerpt":{"rendered":"
Michael Mackey discusses Koreas drive to become North East Asias hub port of choice<\/p>\n","protected":false},"author":8,"featured_media":3371,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[25],"tags":[],"sponsor":[],"class_list":["post-3370","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-asia"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.portstrategy.com\/coastlink\/wp-json\/wp\/v2\/posts\/3370","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.portstrategy.com\/coastlink\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.portstrategy.com\/coastlink\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.portstrategy.com\/coastlink\/wp-json\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"https:\/\/www.portstrategy.com\/coastlink\/wp-json\/wp\/v2\/comments?post=3370"}],"version-history":[{"count":1,"href":"https:\/\/www.portstrategy.com\/coastlink\/wp-json\/wp\/v2\/posts\/3370\/revisions"}],"predecessor-version":[{"id":3372,"href":"https:\/\/www.portstrategy.com\/coastlink\/wp-json\/wp\/v2\/posts\/3370\/revisions\/3372"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.portstrategy.com\/coastlink\/wp-json\/wp\/v2\/media\/3371"}],"wp:attachment":[{"href":"https:\/\/www.portstrategy.com\/coastlink\/wp-json\/wp\/v2\/media?parent=3370"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.portstrategy.com\/coastlink\/wp-json\/wp\/v2\/categories?post=3370"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.portstrategy.com\/coastlink\/wp-json\/wp\/v2\/tags?post=3370"},{"taxonomy":"sponsor","embeddable":true,"href":"https:\/\/www.portstrategy.com\/coastlink\/wp-json\/wp\/v2\/sponsor?post=3370"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}