BUSAN, South Korea — The Port of Busan is taking the significant threat and competition for Asian transshipment cargo about as serious as a port can, and responding aggressively by boosting capacity and facilities.
A new bridge linking older terminals at North Port near the city of Busan with more modern handling capacity at Busan New Port will open next year, reducing the one-hour truck journey for transshipment cargo moving between the facilities.
By 2016, dredging will take approach channels at New Port to 17 meters (59 feet) from 15 meters now, enabling the world’s fifth-largest container port to handle the largest ships afloat, including Maersk Line’s Triple Es. The first of those vessels, capable of carrying 18,000 20-foot-equivalent container units, will make its maiden call at Busan on July 14.
“We can handle the largest ships in the world already, but we think they will get bigger in future, so we’re upgrading now,” a Busan Port Authority spokesman told The Journal of Commerce during a visit to the port this month.
Busan also is bolstering its free trade zones at New Port with a major expansion program, and construction of two berths at the port’s new Western CNTR Terminal will be completed in 2017, with tenders for operators due to be issued next year. Three additional berths will be added by 2019, with tender processes likely to be initiated in 2014.
Busan, whose throughput exceeded 17 million TEUs last year, also is trying to compete on port fees with rivals in China for transshipment traffic, the spokesman said.
“This competition is a big concern, but Chinese ports are heavily dependent on local volumes and don’t have the facilities to attract and handle transshipment traffic,” he said. “Even if they have a very aggressive strategy for transshipment, we’re still more attractive. We have to make sure we’re competitive on handling costs and fees. Handling tariffs for containers at some Chinese ports are cheaper than here, we know that, but we have other advantages such as our modern facilities. Our port dues are competitive and we do our best to give incentives to global carriers to bring more transshipment cargo here year-on-year through rebates.”
He said Busan also has favorable weather conditions. Shanghai and other ports in China are sometimes closed for days at a time due to bad weather, particularly sea fog. Busan was only closed for three days in 2012, and in some years has not had to stop operations at all.
“Our other main strengths are being located on the main trunk route used by global carriers for trade from North Asia to America and vice-versa,” the spokesman said. “And we have very efficient services connecting to China, Japan and Russia. We connect to 60 ports in Japan and 45 in China and offer a total of 358 services each week.”
The port authority’s multifaceted strategy has been successful. Busan posted the second-fastest growth rate among the world’s top five ports in 2012 and has seen the percentage of its transshipment throughput increase to more than 48 percent, from 45 percent in 2010.
The port also accounted for almost 94 percent of transshipment traffic handled at Korean ports last year and boasts 75.6 percent of total domestic containers handled in Korea, ahead of Gwangyang and Incheon, both with less than 10 percent.
Contact Mike King at email@example.com.