ICHCA Conference Korea Port Governance System And New Challenge Issues Prof. Hee Seok Bang Assistant. Jung Ho Na Dong Joon Kang Chung Ang University
Table of Contents Ⅰ Review of World Economy & Korea Port Throughput Ⅱ Factors to be considered for Port Policy & Management Ⅲ Classification of Korean Port & Governing Body Ⅳ Container Port Development in Korea Ⅴ Developing FEZ & FTZ linked with Port Ⅵ Issues to be Discussed Korea Port Governance System & New Challenge Issues
Ⅰ. Review of World Economy & Korea Port Throughput 1 Review of World Economy Trade Scale in Korea (100 million $, %) 2001 2002 2003 2004 2005 2006 2007 Export 1504. 4 1624. 7 1938. 2 2538. 5 2844. 2 3254. 7 3714. 9 Import 1411 1521. 3 1788. 3 2244. 6 2612. 4 3093. 8 3568. 5 Trade Cargo Volume in Korea [ 100 million. R/T ] Year 2000 2001 2002 2003 2004 2005 2006 Total 704 751 776 812 849 874 927 Korea Port Governance System & New Challenge Issues
World Shipbuilding (100 million CGT, %) Country 2005 % 2006 % KOREA 9. 3 35. 5 10. 6 34. 6 JAPAN 8. 0 30. 5 9. 1 29. 7 CHINA 3. 6 13. 7 4. 5 14. 7 ASIA 21. 9 83. 6 25. 4 83. 0 EUROPE 4. 0 15. 3 4. 9 16. 0 Total 26. 2 100. 0 30. 6 100. 0 Resource : Clarkson, World Shipyard Monitor, 2007 Korea Port Governance System & New Challenge Issues
Economic Indicator of N. E. Asia Section Population (million) Dimension (ml. sq. km GDP (billion $) GDP per head ($) Export (billion $) Import (billion $) Foreign Exchange Holding (billion $) Korea 47. 7 99, 585 6, 807 14, 122 257. 7 219. 5 198. 1 Japan 128 378, 000 46, 639 36, 522 540. 3 407. 3 824. 2 China 1, 304 9, 561, 000 16, 007 1, 217 593. 3 538. 9 609. 9 Hong Kong 7 1, 098 1, 646 23, 349 267. 5 279. 2 123. 5 Taiwan 23 36, 000 3, 053 13, 569 173. 1 156. 6 241. 7 Sub-total 1, 510 10, 075 7, 415 17, 755 1, 831 1, 602 1, 997 Total 6, 446 133, 567 55, 500 8, 800 8. 880 9, 215 - (%) 23. 4 7. 5 13. 3 21 17. 4 - - Source: WTO, World Trade Report(2005), CIA, The World Factbook(2005) Korea Port Governance System & New Challenge Issues
2 Korea Port Throughput 2003 2004 Unit : R/T 2005 2006 2007 Total 951, 133, 773 956, 149, 803 984, 534, 280 1, 036, 843, 244 1, 093, 479, 551 Busan 187, 184, 537 215, 032, 399 217, 227 229, 938, 598 243, 564, 954 Incheon 127, 071, 396 113, 654, 061 123, 453, 366 129, 566, 335 138, 139, 357 Pyeongtaek 43, 978, 940 40, 808, 436 42, 514, 023 44, 234, 861 48, 092, 932 Donghae 19, 948, 173 19, 897, 081 19, 923, 307 21, 353, 215 22, 168, 219 Daesan 41, 410, 793 41, 163, 769 44, 720, 057 52, 649, 401 53, 515, 961 Gunsan 15, 690, 899 16, 560, 763 17, 077, 882 17, 502, 072 17, 685, 782 Mokpo 6, 944, 923 6, 262, 041 7, 594, 153 8, 978, 754 14, 202, 826 Yeosu 3, 780, 714 1, 676, 578 2, 587, 211 2, 788, 767 8, 344, 082 Gwangyang 165, 027, 006 170, 486, 999 177, 482, 959 195, 069, 156 198, 189, 085 Pohang 54, 123, 508 56, 297, 352 54, 691, 880 54, 970, 612 61, 875, 145 Masan 11, 484, 938 12, 490, 080 12, 997, 990 11, 907, 024 13, 193, 314 Ulsan 146, 141, 817 160, 214, 236 162, 413, 761 165, 717, 395 168, 651, 699 2, 788, 145 2, 304, 668 2, 245, 345 2, 214, 292 2, 071, 360 125, 557, 984 99, 301, 340 99, 615, 119 99, 952, 762 103, 784, 835 Jeju Others Source ; http: //www. index. go. kr Korea Port Governance System & New Challenge Issues
Traffic Forecast Unit : 000 R/T Annual growth rate 2007 2011 2015 2020 Import 308, 558 371, 465 423, 499 Export 168, 062 200, 359 Coastal 148, 195 T/S Total ‘ 07 -’ 11 -’ 15 -’ 20 492, 427 4. 7 3. 3 3. 1 260, 359 332, 097 4. 5 6. 8 5. 0 166, 873 175, 355 184, 234 3. 0 1. 2 1. 0 120, 648 159, 589 205, 929 275, 361 7. 2 6. 6 6. 0 745, 462 898, 287 1, 065, 142 1, 284, 119 4. 8 4. 4 3. 8 Source : KMI 2008, Crude Oil Traffic is excluded. Traffic Forecast of Container 2003 Unit : 000 TEU 2011 2015 2020 Import & Export 8, 182 14, 933 19, 232 24, 161 T/S 4, 599 11, 214 15, 090 21, 344 405 952 1, 342 1, 906 13, 186 27, 099 35, 664 47, 411 Coastal Total Source : MOLTMA, Ocean Shipping Consultant Korea Port Governance System & New Challenge Issues
Ⅱ. Factors to be Considered for Port Policy & Management 1 Changes in Container Shipping q Main Line / Feeder Service q Changing Client Demands q Alliance, M&A q Increasing Concentration q Emergence of BIG SHIP Korea Port Governance System & New Challenge Issues
Proposed Size of Big Ships Ship Type Capacity (TEU) Length (m) Draft (m) Beam (m) Rows on Beam 8, 800 TEU Class 8, 800 347 14. 0 45. 3 17 12, 000 TEU Class 12, 000 350 14. 5 57 17 Suez-Max 12, 000 400 17. 04 50 25 15, 000 TEU Class 15, 000 400 14 -15 69 28 Malacca-Max 18, 154 400 21. 0 60 - Source : Lloyd List Note : Han-Jin Shipping Line ordered 13, 000 TEU Ship (5 Ships operation in 2010, 4 Ships operation in 2011) Korea Port Governance System & New Challenge Issues
Order and Delivery of Super Container Ships –Emma Maersk Name of Vessel Capacity(TEU) Length(m) Width(m) Row Delivery Date Emma Maersk 11, 000 395 56 Cosco Ningbo 9, 449 349 42. 5 2006 CMA CGM Fidelio 9, 415 348 42. 5 2006 Xin Los Angeles 9, 600 335 45. 3 2006 Hanjin Shipping 10, 000 349 45. 6 2008 Samsung Shipbuilding 12, 000 383 52 Korea Port Governance System & New Challenge Issues 22 2006 2008 Pyeongtaek University
2 Changing Client Demands Diversification/Enhancement of services • Intermodal services • Supply Chain Management • Warehousing and Distribution • Tailored pricing packages • Global service agreements • Advanced cargo care technologies • Container tracking facilities • E-commerce initiatives Korea Port Governance System & New Challenge Issues
3 Integration of the Logistics Providers 1) Expend 3 PL Business(Lead Logistics Providers : LLPs) 2) 4 PL’s Structure 4 PL 3 PL 3 PL Korea Port Governance System & New Challenge Issues
3) 4 PL’s Functions ; - supply-chain engineering - business process re-engineering - IT services and systems capable of connecting to customers and other supply-chain partners(including design of an open systems framework, build, implementation and run activities) - sales and operations planning - call centres - distribution management - procurement - customer support - invoice management - other back office services such as administration, human resource management, finance and legal support Korea Port Governance System & New Challenge Issues
4) Four key components of 4 PL Architect/ integrator 4 PL F I N A N C E -Supply-chain visionary -Multiple customer relationship -Supply chain re-engineering -Project management -Service integrator -Continuous innovation (intelligence) -Experienced logisticians -Optimization engines -Decision support -Neutral positioning -Continuous improvement Supply-Chain Info-mediary -IT system integration -IT infrastructure provision -Real-time data tracking -Convert data to information -Provide info to point of need -Technical support Resource Providers -Transportation -Warehousing -Manufacturing(Outsourcing) -Procurement Service Control Room Korea Port Governance System & New Challenge Issues
5) Suggested 4 PL Model Responsibilities 4 PL Model Supply-chain management layers Key components Consultants/ Business Strategy setting & planning Direction, business model, objectives Tactical planning 4 PL Traditional Model Demand, supply & inventory planning Operational scheduling Customer order mgnt, distribution scheduling Execution Inbound, warehousing transportation, shipping Business 3 PL Korea Port Governance System & New Challenge Issues
4 Increasing Concentration Source: CI Yearbook Korea Port Governance System & New Challenge Issues
As of August 2007, • Maersk Lines controls 16. 1% of the world’s active container fleet • Top 3 carriers(Maersk Lines, MSC, CMA CGM) control 33. 5% • Top 5 carriers control 43. 3% • Top 10 carriers control 60. 5% • Top 20 carriers control 82. 5% Korea Port Governance System & New Challenge Issues
5 Changes in Container Port - Competitive Transshipment - Carrier-driven Port Development - Privatization & Commercialization - Mega hub Port - Emergence of Asian Ports - International Port Operators ; HPH, PSA, DP world - Environmental pressure - New Port Governance Body Korea Port Governance System & New Challenge Issues
Port Logistics Concept - Treat Port as a Logistics System ( Cuts Costs, Better Service to Global Client, Wider Global Coverage, Shorter Transit Time ) - Port Roles Changes in the FEZ, FTZ - Value-Added activities increasing in Port Area - Linkage with Global Logistics Provider ( Global Carriers & Terminal Operators, Freight Forwarder ) - Port & Logistics Hub Strategies Launched in the Asia & Europe Korea Port Governance System & New Challenge Issues
Ⅲ. Classification of Korean Ports & Governing Body 1 Classification of Ports in Korea * Fifty one Ports and Harbor exist in Korea under the Jurisdiction of the Port Act as Following Trade.
Classification of Ports in Korea International trade Ports * Coastal Ports Western Coast Incheon, Pyeongtaek, Daesan, Taean, Boryeong, Janghang, Gunsan, Mokpo (8) Yonggipo, Yeonpyungdo, Daecheon, Bi-in, Deaheuksando, Hongdo, Pengmok (7) Southern Coast Wando, Yeosu, Gwangyang, Jeju, Seoguipo, Samcheonpo, Tongyung, Gohyun, Okpo, Jangseungpo, Masan, Jinhae, Busan (13) Shinma, Nokdongshin, Narodo, Geomundo, Hallim, Whasun, Sungsanpo, Aewol, Chuja, South Busan, Whaheungpo (11) Eastern Coast Ulsan, Pohang, Samcheok, Doughae, Mukho, Okgae, Sokcho (7) Guryongpo, Wolpo, Hupo, Ulreung, Jumunjin (5) Total 28 23 * The MOLTMA is responsible for the planning, construction, maintenance and management of ports Korea Port Governance System & New Challenge Issues
2 Major Ports in Korea 1) Port of Busan · The port of Busan is situated on the southeast coast of the Korean peninsula approximately 400 km by expressway from the capital, Seoul. · Located in a highly industrialized area of Korea, Busan, the 2 nd largest city in Korea with a population of 5 million, is the center for the export of manufactured goods and is a top ranked port in Korea in terms of traffic volume and value.
General Cargo & Container Traffic 2004 2005 Unit : 000 Ton, 000 TEU 2006 2007 General Cargo 215, 032 217, 217 229, 939 230, 304 Container 11, 491 11, 843 12, 038 13, 261 Source ; http: //www. mltm. go. kr Korea Port Governance System & New Challenge Issues
2) Port of Incheon · The port of Incheon, located on the mid-west coast of Korea, is the third largest port next to Gwangyang. · It serves as the gateway to the metropolitan area of Seoul which is only 32 km to the east along a highway. · The inner harbor of the port is controlled by a lock gate because of its location within 9 m tidal wave range.
General Cargo & Container Traffic Unit : 1, 000 Ton· 1, 000 TEU 2004 General Cargo 2005 2006 2007 113, 654 129, 566 136, 475 934 Container 123, 453 1, 148 1, 373 1, 664 Source ; http: //www. mltm. go. kr Korea Port Governance System & New Challenge Issues
3) Port of Ulsan · The port of Ulsan, located in the South-eastern coast Korea peninsula at about 40 km to the north of Busan, was developed as an industrial port in the 1960’s and 1970’s. · Large scale petrochemical industries, a gigantic shipbuilding yard an auto mobile factory of the Hyundai Industrial Group Were installed in this area.
General Cargo & Container Traffic 2004 2005 Unit : 000 Ton, 000 TEU 2006 2007 General Cargo 160, 214 162, 414 165, 717 168, 272 Container 302, 870 316, 432 331, 330 380 Source ; http: //www. mltm. go. kr Korea Port Governance System & New Challenge Issues
4) Port of Gwangyang · The port of Gwangyang, located on the mid-southern coast, is a new industrial port developed in the 1980’s. · It has become the gateway to the bay area housing the Yeocheon Industrial Complex of a large oil refinery, petrochemical factories, a gigantic Gwangyang steel mill (POSCO) and related industries. · The port of Gwangyang has the distinct advantage of not being surrounded by the agglomeration area of big cities, thus affording plenty of space for further expansion.
General Cargo & Container Traffic Unit : 000 Ton, 000 TEU 2004 General Cargo 2005 2006 2007 170, 487 195, 069 196, 433 1, 321 Container 177, 483 1, 441 1, 756 Source ; http: //www. mltm. go. kr Korea Port Governance System & New Challenge Issues
5) Port of Pohang · The port of Pohang, located at the southeastern coast of the Korean peninsula, has been one of the leading industrial ports. · It serves the POSCO (Pohang steel Mill Co. ) and its related industrial complex in the hinterland of the port
General Cargo & Container Traffic Unit : 000 Ton, 000 TEU 2004 2005 2006 General Cargo 160, 214 162, 414 165, 717 Container 302, 870 316, 432 331, 330 Source ; http: //www. mltm. go. kr Korea Port Governance System & New Challenge Issues
3 Port Planning and Developing Body * In accordance with the restructuring of the government, the Ministry of Maritime Affairs and Fisheries (MOMAF) was inaugurated on August 8 1996, incorporating all the maritime related affairs into one super-agency including the Korea Maritime and Port Administration (KMPA), the Maritime Accidents Inquiry Agency and Hydro graphic Bureau previously under the Ministry of Construction and Transportation (MOCT), Fisheries Administration previously under the Ministry of Agriculture and Fisheries, Maritime Police Administration under the Ministry of Home Affairs and Marine Resources Development previously under the Ministry of Science and Technology * At present, MOLTMA(Ministry of Land, Transport & Maritime Affairs) is the Federal Government to control port plan & development since New Government was inaugurated in the early of 2008. Korea Port Governance System & New Challenge Issues
· MOLTMA is the government Body to serve following port development & management. - long term and medium term port policy for future development - establishment of port master plan - establishment of technical standards for port planning, design and construction - supervision of feasibility studies, surveys and detail design work for port development - control of capital investment - overall planning of port operations - construction and maintenance of infrastructure (breakwater, seawall, quay-wall, lock gate) - construction of transportation facilities connecting ports and hinterland - planning & construction of logistics facilities and ICD - formulation of basic plan on private investment on port facility project - construction and installation of superstructure (pavements, operation, building, shed, gantry cranes) - dredging and maintenance of access channels - port tariffs - installation and maintenance of navigation aids’ facilities (lighthouses, beacons) - control of public water space within the port limits - licensing port operation related companies (stevedore, tugboat, ship-supply etc) - compilation, analysis and provision of port statistics Korea Port Governance System & New Challenge Issues
Summary of Port Related Organization in Korea MOLTMA KL-Net 11 Branches Invest Busan Incheon Ulsan Public Water Management Lease Yeosu, Masan Donghae Gunsan, Daesan Mokpo, Pohang Pyeongtaek BPA IPA UPA KCTA Port Management Terminal Lease Terminal Management & Lease Borrow & Lease Terminal TOC Port EDI Korea Port Governance System & New Challenge Issues Terminal Operator
Preview of Korean Port Administration in History Year Organization 1976 Korea Maritime and Port Administration(KMPA) 1989 Korea Container Terminal Authority(KCTA) 1996 Ministry of Maritime Affair and Fisheries(MOMAF) Main Content Renamed from the Korea Port Authority Under Central Government Port Management and Development Operating and Managing Container Ports Under Central Government Management & Development of Container ports for KMPA Port Management and Development Central Government Expanded to the Ministry Level(From KMPA to MOMAF) Busan Port Authority(BPA) Management & Development of Busan’s Entire Port Facilities Independent Corporation under the Port Authority Law Current Busan and New Container Ports 2005 Incheon Port Authority(IPA) Management & Development of Incheon’s Entire Port Facilities Independent Corporation under the Port Authority Law Current Incheon and Songdo New Ports 2007 Ulsan Port Authority(UPA) Management & Development of Ulsan’s Entire Port Facilities Independent Corporation under the Port Authority Law 2008 MOLTMA 2003 Function is same as MOMAF Korea Port Governance System & New Challenge Issues
Port Legislation and Administrators Classification Contents Administrator Designation, Development & Management/Operation of Ports Port Policy Division of MOLTMA New Port Construction Promotion Law Formulation of Basic Plan on New Port Construction Designation & Management of the Area Determined for New Port Construction Port Development Division of MOLTMA Law of Private Participation in Infrastructure Formulation of Basic Plan on Private Investment Facility Project Conclusion of Concession Agreement & Designation of Concessionaire Private Investment Division of MOLTMA Act on Korea Container Terminal Authority Establishment & Operation of Korea Container Terminal Authority Except for Busan & Incheon Development & Operation of Container Terminals Financing of Development Funds, etc. Korea Container Terminal Authority(KCTA) Act on Busan Port Authority Management & Development of Container Port, Facilities & Areas(e. g. distripark, Inland depot) related to Busan Port Management & Development of Overseas Container Ports Busan Port Authority(BPA) Act on Incheon Port Authority Management & Development of Container Port, Facilities & Areas(e. g. distripark, Inland depot) related to Incheon Port Authority(BPA) Act on Ulsan Port Authority Management & Development of Container Port, Facilities & Areas(e. g. distripark, Inland depot) related to Ulsan Port Authority(BPA) Harbour Act Source ; Complied from MOLTMA Materials Korea Port Governance System & New Challenge Issues
Ⅳ. Container Port Developing in Korea 1 Location Map of the Korea Ports Korea Port Governance System & New Challenge Issues
Layout of the Port Busan Container Terminal Korea Port Governance System & New Challenge Issues
2 New Port Development Plan q Major Port Development Plan • Designated nine Ports as a New Port Development Project – Three National Big Projects – Six New Port Projects Korea Port Governance System & New Challenge Issues
Three National Big Projects - Busan New Port Korea Port Governance System & New Challenge Issues
Three National Big Projects - Busan New Port Korea Port Governance System & New Challenge Issues
Three National Big Projects - Gwangyang New Port Korea Port Governance System & New Challenge Issues
Three National Big Projects - Gwangyang New Port Korea Port Governance System & New Challenge Issues
Three National Big Projects - Gwangyang New Port Korea Port Governance System & New Challenge Issues
Three National Big Projects - Pyeongtaek New Port Korea Port Governance System & New Challenge Issues
Six New Port Projects - Gunsan New Port Korea Port Governance System & New Challenge Issues
Six New Port Projects - Mokpo New Port Korea Port Governance System & New Challenge Issues
Six New Port Projects - Ulsan New Port Korea Port Governance System & New Challenge Issues
Six New Port Projects - Pohang New Port Korea Port Governance System & New Challenge Issues
Ⅴ. Developing FEZ & FTZ linked with Port 1 Existing FEZ Free Economic Zones Spearhead Infrastructure Strategic Location Ideal Business Environment Differentiation Upscale Living Conditions Support & Incentives Korea Port Governance System & New Challenge Issues Other Regions
Global competition Market competition Free Economic Zones 21 st Century Corporate mobility Businessfriendly environment Korea Port Governance System & New Challenge Issues Leader
Why Free Economic Zones in Korea? Northeast Asian Business Hub Geographic advantage Sustainable economic growth Facilitating foreign investment Korea Port Governance System & New Challenge Issues
Northeast Asian Business Hub Strategy Foreign Investment Openness Regional Economic Cooperation Korea Port Governance System & New Challenge Issues
Korea’s FEZs Why Incheon, Busan-Jinhae and Gwangyang? - Logistical advantage - Excellent infrastructure Incheon FEZ Busan-Jinhae FEZ Gwangyang FEZ Korea Port Governance System & New Challenge Issues
FEZ Benefits Optimal Business Environment Superb Living Conditions One-Stop Administrative Services Korea Port Governance System & New Challenge Issues
Optimal Business Environment Tax reductions Deregulation Labor flexibility Korea Port Governance System & New Challenge Issues
Superb Living Conditions International schools Theme parks Parks and golf courses World-class medical care Korea Port Governance System & New Challenge Issues
One-Stop Administrative Services Free Economic Zone Authorities One-Stop Administrative Services Foreign Investment Ombudsman’s Office Korea Port Governance System & New Challenge Issues
2 New FEZ Three New Projects in Korea Yellow Sea FEZ Daegu-Gyeongbuk FEZ Saemangeum-Gunsan FEZ Korea Port Governance System & New Challenge Issues
Three New Projects : Yellow Sea FEZ - Location Chung-Nam & Gyeong-Gi nearby Pyeong. Taek∙Dang. Jin Port - Dimension : 16836. 48 acre - Development Period : 2008 -2025 1 st Phase : 2008 -2013, 2 nd Phase : 2014 -2019, 3 rd Phase : 20202025 - Development Plans - To constitute world class High-Tech industry cluster - To establish the Northeast Asian trade & value-added logistics base Korea Port Governance System & New Challenge Issues
Three New Projects : Daegu-Gyeongbuk FEZ - Location Dauge, Gyeongsan, Yeongcheon, Gumi etc - Dimension : 8584. 78 acre - Development Period : 2008 -2020 1 st Phase : 2008 -2013, 2 nd Phase : 2014 -2020 - Development Plans - To develop the Northeast Asian knowledge-based industry center - To Establish global industry cluster with fostering regionally specialized knowledge-based industry Korea Port Governance System & New Challenge Issues
Three New Projects : Saemangeum-Gunsan FEZ - Location Gunsan, Buan, Saemangeum reclaimed land, etc - Dimension : 23795. 83 acre - Development Period : 2008 -2030 1 st Phase : 2008 -2020, 2 nd Phase : 2021 -2030 - Development Plans - To develop the core manufacturing base of future new industry - To foster the best international tourist & leisure industry hub in East Asian Korea Port Governance System & New Challenge Issues
Ⅵ. Issues to be Discussed - Reducing Public Functions - Encouraging Active Privatization - Port Co-opetition Strategies among the regions will be needed - Deregulation will be improved - Observing Liners Centralization - Accurate Traffic Technology Forecasting - T/S Cargo pattern will be Changed - Over Capacity Issues - Governance Bodies of FEZ - Improved Foreign Investment Fund - China’s Economic and Traffic Growth - Improved Port Governance System - Observing Ship’s Size to be called Korea Port Governance System & New Challenge Issues
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