Busan invests in developing economies

Busan - Busan Port Authority (BPA), the world’s sixth-largest container port, is planning to invest in overseas port and logistics facilities as a key strategy that will help define the future of the South Korean port. In an article published in trade journal for transportation, JOC.com, BPA’s chief executive, Woo Ye Yong, explained how the port is collecting and analysing global market information with a view to investing in port infrastructure and operations in developing economies. “BPA is beginning to make efforts towards fortifying the foundation of overseas business in the long term. We want to pass on our know-how in the operation and development of Busan Port to developing countries that need port infrastructure for their economic growth,” said Mr Woo. Mr Woo listed overseas expansion as one of his three main priorities for the future development of Busan.

The other two are to build transshipment and to realise the successful completion of the $8bn North Port redevelopment project. Handling more than 10m transshipment containers for the first time in its history last year, the port will continue to focus on developing transshipment volumes, in part to offset negative macroeconomic factors such as China’s slowdown. Infrastructure improvement projects and pricing incentives are being implemented to support the building of transshipment volumes. Dredging works to increase the port’s draft and works to remove a small island at the entrance to the port are underway in order to better facilitate mega-ships and BPA is also providing cash incentives to shipping companies that put high volumes of transshipment cargo through the port.

Busan is targeting throughput of 20m teu in 2016, a figure Mr Woo told JOC.com is very achievable as the port continues its marketing efforts and logistics companies offer more value-added services at the port’s distribution centres. One of the main challenges faced by Busan is to facilitate the successful balancing of business between two different port systems, Busan New Port, and the old port known as Busan North Port. BPA introduced an Inter-Terminal Transportation incentive scheme that provides cash to container lines to help offset additional costs resulting from the transfer of boxes between different terminals. The functions of the two ports are to be differentiated, with North Port gradually becoming a feeder port primarily serving intra-Asia trades and the New Port becoming a specialised hub for mega-ships operated by global lines.

The ongoing integration of terminal operators at Busan is designed to improve efficiency in the operations of the two port systems. Last year BPA announced that the companies operating the four terminals in North Port would be merged by July. Regarding future plans, Mr Woo told JOC.com there would be a strong focus on improving productivity at the terminals with a view to reducing dwell times and costs for customers. Productivity assessments to encourage terminal operators to better service customers are being undertaken and the port is reviewing regulations that may be impeding more efficient cargo handling.

(Source: Portstrategy)