South Korea to Invest $10B to Expand Busan Port’s Competitiveness
South Korea’s Ministry of Oceans and Fisheries unveiled an ambitious plan that they said will ensure the continued global competitiveness of the Busan port. It plans to invest a total of $10 billion including the creation of a new container complex that will be among the largest in the world.
Detailing the Global Hub Port Construction Strategy, the ministry asserted that it is necessary to preemptively strengthen the competitiveness of Busan to continue to attract global shipping companies. It points to the investments at ports such as in China and Singapore where they are enlarging terminals, building smart ports, and pursuing eco-friendly initiatives.
Busan ranks among the busiest container ports and handles three-quarters of South Korea’s domestic container volume. It is also a key transshipment hub accounting for 97 percent of the volume. Since 2015, Busan has been the world’s second-largest transshipment port according to data from the ministry.
The plan however also recognizes that Busan Port is facing some operational difficulties. It points to challenges with inter-berth transshipment and inefficiency in berth management as there are multiple terminal operators. Announcing the initiative, they also said the port must respond to the larger size of vessels and the changes in the landscape of shipping industry alliances.
They have determined a transition to a mega port and improvement of the port’s operational structures are required. The goal is to solidify its status as a global hub port and to raise its competitiveness as well as streamline operations.
The $10 billion investment will fund the creation of the Jinhae New Port alongside Busan. It will rival the size of Singapore’s under-development Tuas Port with the ministry reporting the new Korean port will have a total of 66 berths, It will be able to handle future vessels with a capacity of 30,000 TEU and increase container yard space by 1.5 times versus the current facility.
The plan calls for a single operator for the first phase of the new port which will consist of nine berths and be able to handle over 6 million TEU annually. The size was planned to coincide with the current 6.5 million TEU handled by The Alliance at Busan currently. Further, the ministry will offer incentives of up to nearly $7 million to ensure that the terminal operators of the existing new port are integrated.
Other elements of the investment call for the creation of an expanded overseas logistic center and a port hinterland complex to attract global logistics companies. South Korea plans to expand from five international offices promoting the port to eight locations by 2027 and 16 by 2032. They will focus on the eastern U.S., Southeast Asia, and Europe to promote the port and attract shipping and logistics companies.
The ministry will also promote an eco-friendly port conversion. They plan to transition to 25 percent renewable power by 2032 and 100 percent by 2050.
Minister of Oceans and Fisheries Kang Do-hyung emphasized the importance of strengthening the port and addressing changes in the shipping industry. He said reorganizing the supply chain presents opportunities and would also protect South Korea from regional and global changes.