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Overview
:
While there is progress in
some areas, e.g. introduction
of 24 hours customs clearance
at Incheon airport, the many
critical issues of Korea’s logistics
environment remain unchanged.
The industry is fragmented,
lacks transparency, suffers
from high costs and continues
to focus on infrastructure upgrades
without addressing necessary
changes in regulation and procedures.
The overall degree of outsourcing
and standardization is low,
many activities add no or low
value, and the interface between
domestic and international logistics
systems is insufficient. The
government is well aware of
these issues, but must address
them in a more efficient manner.
In 2004 Korea’s export volumes
grew dramatically, breaking
new records. While this is healthy
for Korea’s economy, the already
congested road network and Pusan
port have difficulty coping.
The movement of goods by rail,
which would ease road congestion,
is neglected and usage is declining
since several years.
Regarding costs, the latest
statistics from MOCIE show that
logistics costs in Korea have
been reduced, but at 9.9 % of
sales total they are still twice
as high as Japan and 50% above
US logistics costs.
Incheon
airport :
The new Incheon airport is approaching
operation in the 4th full year,
phase II extension is in progress.
Finally, adequate facilities for
forwarders and logistics providers
will be made available, unfortunately
only connected to the airfield
by a tunnel. Overall the airport
is a success, however in the view
of this committee two areas of
concern must be mentioned. The
continuous domination by national
carriers and rising operating
costs threaten hub development
and growth by competing airlines
and logistics operators.
Ports
:
Ports continue to be crowded,
show lower productivity and
higher costs than other regional
ports. Korean port costs are
at least 35 - 40 % higher than
Chinese ports, the moves per
crane and hour are 15 % below
other Asian ports and there
are fewer working hours. The
Pusan port is slowly reaching
limits to cope with volume.
On the positive side, the new
ports and logistics parks in
Pusan and Gwangyang promise
relief and new opportunities.
Trade
issues & recommendations :
A lot of time was lost in 2004
due to political issues and
the proposed hub initiatives
could not push through much
needed reforms in the transportation
sector. The EUCCK logistics
committee has high expectations
for 2005 and is anxiously watching
the proposed legislative changes
to promote logistics companies.
If implemented quickly and completely,
the trade issues and recommendations
outlined below will further enhance
and accelerate the necessary changes
in the Korean logistics environment.
We welcome this platform and opportunity
to jointly work with the concerned
ministries to push Korea into
a leading position in logistics.
We would like to continue our
consultations and meetings with
MOFAT which are always held in
a mutually positive spirit. |
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