Page 29 - Sphere No.7 (Oct 2002)

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mencement of the development of the Kwangyang Container
Terminals Phase 3 (for which KIT has recently put down a
deposit). It will incorporate an advanced logistics centre, increase
total berth length to 11.7km and boost annual cargo capacity to
more than nine million TEUs. But the next decade of develop-
ment will rely on how effectively Kwangyang can be promoted,
and how well it can merge with Pusan.
“Obviously people see us as the “golden goose”, so to speak,
as we’re bringing in business,” comments Lee Seok, KIT’s CFO.
“And we do: when Hutchison moves in to a country, it does put
those ports on the map. However, there are a lot of allegiances in
the shipping industry, and it may take some time for them to
recognise the advantage and move to Kwangyang. That’s been
eroded to some extent when it comes down to the actual sav-
ings – but still, loyalties are fairly strong [in Korea].”
The Korean Government itself realises this and has declared
Kwangyang a Customs Free Zone (in addition to its Tariff Free
status shared with Pusan) in a bid to attract more start-up inter-
est. Stevedoring costs are now amongst the most competitive in
the world – even lower than in China – and the port has subse-
quently seen a 43% rise in cargo handling to 517,594 TEUs in the
first half, including a 204% surge in transhipments.
Although the above figure represents only a fraction of Pusan’s
total handling volume, KIT Terminal Manager Robert Poon says
it’s only a matter of time before Kwangyang becomes the tran-
shipment hub of northern China.
“Shipping from Mainland China to the US takes 13 days. But
from Kwangyang to the US only takes 11 days. So if you use a
feeder line from China to Kwangyang you save two days, which is
big time for shipping lines.”
Korean inland freighters can also save time and money using
Kwangyang. According to the Korea International Trade
Association, if just 20% of all container cargo from Seoul and cen-
tral areas were diverted to Kwangyang, an estimated 40 billion
won (about US$35 million) worth of logistics costs would be
saved each year. That’s an average saving of three hours and
US$50 per TEU over the congested Seoul-Pusan rail link.
But perhaps Kwangyang’s biggest advantage over its built-up
sister port, according to KIT Chief Executive Officer Paul Ho, is
it’s developing status. “The advantage for any shipping company
coming to KIT is we’ve got excellent brand new facilities and we
have space, we can turn them around very quickly and we can
guarantee them slots that fit into their window with no waiting
period. Kwangyang certainly offers flexibility, but it also offers the
same high quality of service that shipping lines have come to
expect at all Hutchison ports around the world.”
Hutchison Port Holdings, Hyundai Merchant Marine,
Hanjin Shipping Korea International Terminals (KIT) (Kwangyang)
Korea International Terminals (KIT) (Kwangyang)
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