Potential of Coastal Shipping and Inland Navigation in Republic of Korea
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1 Potential of Coastal Shipping and Inland Navigation in Republic of Korea Dong Won HAN Korea Shipping Association UNESCAP Regional Conference for Logistics Service Providers
2 CONTENTS 2
3 1Seaports and Routes 2Cargo Transport 4Domestic Passenger Transport 5Ships and Crew 3
4 1Seaports and Routes 1Seaports and Routes 2Cargo Transport 4Domestic Passenger Transport 5Ships and Crew 4
5 1Seaports and Routes 1Seaports and Routes 2Cargo Transport 4Domestic Passenger Transport 5Ships and Crew Seoul Incheon Pyongtaek Donghae Pohang Ulsan Yeosu Gwangyang Masan Busan 5
6 1Seaports and Routes 1Seaports and Routes 2Cargo Transport 4Domestic Passenger Transport 5Ships and Crew There are : 28 Open seaports 23 Domestic seaports in the mainland 1 Inland waterway ; and 112 Domestic passenger line routes 6
7 2Cargo Transport - 5 Years Average 1Seaports and Routes 2Cargo Transport 4Domestic Passenger Transport 1,242 by International Shipping 134 by Korean ships 1,108 by others (Unit : Million R/T) 5Ships and Crew 127 by Coastal Shipping 121 by freighters 6 by ferries 884 tons through inland waterway(year 2016) 7
8 2Cargo Transport by Coastal Shipping 1Seaports and Routes 2Cargo Transport 4Domestic Passenger Transport 5Ships and Crew 8
9 * 18km long, 80m wide, 6.3m deep 1Seaports and Routes 2Cargo Transport 4Domestic Passenger Transport 5Ships and Crew 9
10 Connecting Incheon port and the Han River in Seoul 1Seaports and Routes 2Cargo Transport 4Domestic Passenger Transport 5Ships and Crew 10
11 1Seaports and Routes 2Cargo Transport 4Domestic Passenger Transport End part of the river is not open for traffic because of border line between South and North Korea thereon So, a canal was needed to reach Seoul by ships 5Ships and Crew 11
12 * West-end Cargo Terminal 1Seaports and Routes 2Cargo Transport 4Domestic Passenger Transport 5Ships and Crew 12
13 * East-end Cargo Terminal 1Seaports and Routes 2Cargo Transport 4Domestic Passenger Transport 5Ships and Crew 13
14 1Seaports and Routes 2Cargo Transport 4Domestic Passenger Transport 5Ships and Crew The Canal was constructed by a state-run company at approx. US$18 billions and open in 2011 to be used for : Prevention of flooding in that area Providing waterway for carriage of approx. 8,000 tons of cargoes per year, giving benefit from lessening of heavy land traffic congestion Providing waterfornt leisure space * The waterway has been pretty quiet due to low demand, thus ideas to be sought to attract users 14
15 4Domestic Passenger Transport 1Seaports and Routes 2Cargo Transport 4Domestic Passenger Transport 5Ships and Crew Total Domestic Passengers : 14M to 16 M Of which : Islands Inhabitants - Approx. 30% Visitors - Approx. 70% 15
16 5Ships and Crew(For Merchant Ships) 1Seaports and Routes 2Cargo Transport 4Domestic Passenger Transport 5Ships and Crew Ships on Korean registry Ocean-going : 1,026 (14 Mil. DWT) Coastal Cargo Ships : 2,076 ( 2 Mil. GT) * 756 companies Coastal Passenger Ships : 170 * 58 companies Crew Ocean-going : Korean 8,500 / Others 12,136 Coastal : Korean 7,900 / Others
17 1Brief Introduction 2Activating Coastal Shipping 3Providing Marine Insurance Cover 4Providing Integrated Passenger Ticketing Service 1Brief Introduction 2Activate Coastal Shipping 3Provide Marine Insurance Cover 4Provide Integrated Passenger Ticketing Service 17
18 1 Brief Introduction 1Brief Introduction 2Activating Coastal Shipping 3Providing Marine Insurance Cover 4Providing Integrated Passenger Ticketing Service Korea Shipping Association : is association of coastal shipping service providers in South Korea has existed since 1949; and is promoting advancement of economical and social status of coastal shipping service providers 18
19 2 Activating Coastal Shipping 1Brief Introduction 2Activating Coastal Shipping 3Providing Marine Insurance Cover 4Providing Integrated Passenger Ticketing Service For Freighters, we coordinate : Ship finance in liaison with state-run bank, for newbuilding ships Freight subsidy to shippers whose cargoes are carried by ships instead of trucks or railroad trains Gasoil tax benefit from government 19
20 2 Activating Coastal Shipping 1Brief Introduction 2Activating Coastal Shipping 3Providing Marine Insurance Cover 4Providing Integrated Passenger Ticketing Service For Passenger ships, we : Develop new business models Coordinate fare subsidy by government to islands inhabitants to encourage travelling Operate passenger terminal entrusted by government 20
21 2 Activating Coastal Shipping 1Brief Introduction 2Activating Coastal Shipping 3Providing Marine Insurance Cover 4Providing Integrated Passenger Ticketing Service And also we : Assist crewing through discussions with unions Propose to government to improve unreasonable or outdated restrictions on maritime safety and marine environment and shipping business as well Supply marine fuels to the members ships, as intermediary, at competitive price Give the members loan for company operation 21
22 3 Providing Marine Insurance Cover 1Brief Introduction 2Activating Coastal Shipping 3Providing Marine Insurance Cover 4Providing Integrated Passenger Ticketing Service Provide insurance cover for hull, P&I, shipbuilders risks, etc. Plus, Run Crew Wage Compensation Fund by law * Payment for max. last 3 months wage plus last 3 years retirement allowance, in case a shipping company becomes insolvent 22
23 4 Providing Integrated Passenger Ticketing Service 1Brief Introduction 2Activating Coastal Shipping 3Providing Marine Insurance Cover 4Providing Integrated Passenger Ticketing Service Operate integrated computerised passenger ticketing system for member companies Plus, Do sales promotion in liaison with the government to increase demand, including media and non-media marketing activities 23
24 1 Role of Coastal Shipping in South Korea 2 Trend 24
25 1Role of Coastal Shipping in the Region 1Role 2Trend Transporting cargoes and passengers between ports and between the mainland and 471 inhabited islands It shares 19.1% of total domestic cargo transport * Except for Jeju Island, all passengers and cargoes are carried by ships to and from the islands Backing up road cargo trucks and railroad cargo trains in case they stop carrying because of strike Playing its role as No. 4 military in a state of national emergency 25
26 2Trend 1Role 2Trend Total quantity of cargo carried is firm where there has been economy recession on the one hand but demand for construction materials increases on the other Number of passengers is slowly increasing with the effort of the government to boost domestic market Laws and regulations for maritime safety, marine environment and maritime labour, are tightening up Coastal Shipping fails to attract young seamen 26
27 1 Freighters 2 Passenger Shipping 3 Crewing oastal $hipping 27
28 1Freighters 1Freighters 2Passenger Ship 3Crewing Government subsidies and assistance to be maintained for recovery of coastal shipping Financial assistance, e.g. extending loan period, increasing LTV ratio, etc. Subsidy for ordering eco-friendly ship Fair market to be in place in the fierce competition among shipping companies 28
29 2Passenger Ships 1Freighters 2Passenger Ships 3Crewing Safety is a Top Priority policy to be always maintained Quality of transport service to be remarkably improved, in order to attract more passengers 30% of old ships to be replaced with new ones, by the year 2020 No. of yearly passengers to 17M from 16M in 2016 Customers satisfaction to 90% from 88% in 2015 Average age of ships 12 from 14 in
30 3Crewing 1Freighters 2Passenger Ship 3Crewing Keeping manning costs under control where working conditions are weak Government and the industry seeking solutions by : Preparing for Seamen Retirement Pension Program Applying tailor-made and on-the-job seamen training program Maintaining regular tripartite discussions among seamen s unions, employers and government 30
31 1 Safety 2 Survival 3 Unfair Trade Crew Law Strategy Over-Supply Culture Know-how Competition 31
32 1Safety Issue 1Safety Issue 2Survival 3Unfair Trade Increase of old age crew by shortage of good crew may hinder safety of ship Laws and regulations on maritime safety, marine environment, maritime labour are being reinforced Ratification of international conventions thereon and its incorporation into domestic law to be applied to coastal ships, pushing costs up * e.g. MARPOL Annex VI(sulphur contents of ship s fuel), Ballast Water Management Convention, Maritime Labour Convention Safety culture yet to be settled Mere compliance is not enough 32
33 2Survival Help of government is not evergreen but time-limited Thus, ship operators themselves to find strategy and accumulate know-how for survival, including : Saving costs; and Getting good business from quality transport service 1Safety 2Survival 3Unfair Trade 33
34 3Unfair Trade Over-supply of tonnage by low entry barrier causes : Fierce competition Freight rate down too much ; and in turn Unfair trade practice emerges to obtain business 1Safety 2Survival 3Unfair Trade 34
35 South Korea has Potential for Coastal Shipping and Inland Navigation since there are numerous seaports and islands requiring seaborne transport But, Prospect of Coastal Shipping market is not bright because of : Fierce competition by over-supply of tonnage Shortage and aging of crew affecting safety of ship Failure to attract users of inland waterway; and Reinforcement of laws, regulations and conventions, pushing costs up Shipping companies to find plan for survival, besides help of government And, also to commit to fair play 35
36 Thank You. 36
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