Massive expansion underway at Incheon
The Korean port of Incheon sits just 32 km away from the nation’s capital, Seoul. This gigantic metropolitan area is home to half the country’s population and generates half of its GDP.
To call it the thriving business centre of Korea is an understatement. More than 120 of the country’s 501 industrial complexes operate from the metro area, and these factories produce 35 percent of Korea’s container volume. The total throughput of Korea last year was 20 million TEUs, and with the port of Incheon, an hour down the road, handling just two million boxes, there is much room for growth.
During a roadshow to promote the port to transport and logistics operators in the region, Incheon Port Authority president Kim Choon-Sun told Cargonews Asia that expansion projects would improve the service offerings of the port.
“Five years ago we had two main problems: we could only accommodate vessels with a maximum of 4,000 TEUs, and there was a lack of logistics space,” he said.
“That was a big obstacle for port growth. Even though the port hinterland includes the Seoul metro area we faced problems expanding our business.”
Kim said Incheon New Port is under construction and Phase 1 will comprise six berths along a 1.6 km quay handling ships of up to 10,000 TEUs by 2014. By 2030, there will be 25 box berths and four general cargo berths.
The scale of the project is immense. Incheon New Port and the area occupied by the two logistics zones, Ah-am Logistics Complexes 1 and 2, will total almost 10 sq km. Although the Incheon Free Economic Zone is not a port authority project, it is also on reclaimed land adjoining the port and takes the total reclamation area to an incredible 220 sq km. That is more than seven times larger than the territory of Macau.
Asked about overcapacity among Korea’s ports, Kim said some worries were raised but Incheon was building the logistics facilities that would attract new business.
He also pointed out that shippers in the metro area had to travel for five hours to get from Seoul to Busan to ship their goods. This was “inconvenient and costly”.
“Then when you look at Northern China, you see it is growing and Incheon is the closest port, so we have to develop,” he said.
Incheon port handled two million TEUs last year and is forecast to make a slight improvement on that to 2.1 million boxes this year. In 2014 when the new port phase 1 is online, the throughput will increase to three million TEUs. By 2020, it will be handling 5.4 million boxes.
Korea’s busiest port is Busan, but Kim did not believe the increasing Incheon container volume would come solely at the expense of the southern port.
“We are expecting a positive future for the Korean economy and this will bring added cargo volume. Naturally if we offer the deep-sea services, the big customers will use us instead of Busan, but Busan and Incheon are not really competing.
“Busan is mainly transhipment but is used by shippers from the Seoul metro area because they don’t have a choice. Once the new infrastructure is in place at Incheon, the shippers will follow,” Kim said.