Korea cuts transshipment fees

Korea cuts transshipment fees

South Korea is fighting back as its main ports continue to see business slip away, denting ambitions to become northeast Asia's regional transshipment and logistics hub.

Beginning next month, discounts will be offered on transshipment loading and unloading charges at the Port of Busan and nearby Port of Gwangyang.

The Ministry of Maritime Affairs and Fisheries said the cuts -- initially valid until November 2005 -- will apply to volumes in excess of 200,000 TEUs a year and will save customers some 2 billion won ($1.8 million) annually.

The reductions will also apply for companies generating a more than 20 percent increase in transshipment cargo at the two ports from a year earlier, a ministry spokesman said.

In the first 10 months, Busan handled 8.6 million TEUs, 11 percent up on a year earlier. Transshipments accounted for 41.3 percent of volume, only fractionally higher than a year previously.

For October alone, Busan transshipments skidded to 38.5 percent, official figures show.

At Gwangyang along the south coast, the October volume of 108,409 TEUs showed a 7.3 percent increase year-on-year. But transshipments were down to 25.6 percent from 36.8 percent.

-- P.T. Bangsberg in Singapore