Inland Container Depot(ICD) in Korea: focusing on Uiwang and Yangsan
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1 Inland Container Depot(ICD) in Korea: focusing on Uiwang and Yangsan Dr. PARK, Ju Dong Dr. JO, Ji Sung Dr. KIM, Geun Sub Port Policy Research Department
2 Contents I Inland Container Depot(ICD) in Korea II Uiwang ICD III Yangsan ICD IV Dry Port Development in Asia-Pacific V Lessons and Learned 1
3 I. Inland Container Depot(ICD) in Korea 2
4 ICD in Korea 5 ICDs in Korea Metropolitan Area: Uiwang ICD Honam Area: Jangsung ICD Central Area: Sejong ICD Yeongnam Area: Chilgok ICD Busan Area: Yangsan ICD Source : Ministry of Land, Infrastructure and Transport(MOLIT), Inland Logistics Hub in 5 Regions of Korea,
5 ICD in Korea Infrastructure of 5 ICDs Capacity Area Bulk (thousand TON /year) Container (thousand TEU /year) CFS (thousand R/T /year) Size( m2 ) Metropolitan Uiwang ICD 1, ,807 Honam Jangsung ICD 4, ,203 Central Sejong ICD 2, ,422 Yeongnam Chilgok ICD 3, ,026 Busan Yangsan ICD 1,410 4, ,241 Source : Ministry of Land, Infrastructure and Transport(MOLIT), Inland Logistics Hub in 5 Regions of Korea,
6 II. Uiwang ICD 5
7 Uiwang ICD Korea s first Began to operate in 1984 ICD Terminal 1 in 1993 & Terminal 2 in 1997 Korea s largest Total area : 754,807m2 Total 51 tracks 17 main tracks 3 side tracks 12 tracks for container 15 tracks for general cargo 2 repair tracks 2 lead tracks Source : Korean Rail Road Corporation(KORAIL),
8 Uiwang ICD Container Total 12 tracks 8 at Terminal 1 3 at Terminal 2 1 at Container Yard(CY) Max of 31 services per day 16 outbound & 15 inbound Max of 63 daily services in total by day Source : Uiwang ICD web( Mon(48), Tue~Fri(63), Sat(53), Sun(36) 389 services per week Container: 164 per week(42%) Cement: 157 per week(40%) Steel: 56 per week(15%) Paper: 12 per week(3%) Source : Korean Rail Road Corporation(KORAIL),
9 Uiwang ICD Cargo flow of rail based shipment Manufacture (Shipper or 2PL) Truck Obong Station Rail Sea Port (Busan, Gwangyang, etc.) Source : Korean Rail Road Corporation(KORAIL), Contracted vs. Uncontracted Service Contracted service(private rail) Annual contract between customer and operator by train unit Fixed rate(excluding cargo volume) Uncontracted service Urgent and unpredictable cargoes Relatively higher rate 8
10 Uiwang ICD Structure of Total Revenue in 2016 Cargo Transportation Business Cargo Volume (ton) Outbound Inbound Total Revenue ($) Volume (ton) Revenue ($) Volume (ton) Revenue ($) Container 2,590,614 27,055,720 1,995,600 19,718,850 4,586,214 46,774,570 Cement 0 0 3,316,446 28,334,510 3,316,446 28,334,510 Steel 3,174 31, ,731 5,131, ,905 5,162,590 Paper ,124 1,692,480 92,124 1,692,480 Others 137, ,400 44,034 66, , ,660 Total 2,731,333 27,333,160 5,942,935 86,742,680 8,674,268 82,276,810 Source : Korean Rail Road Corporation(KORAIL),
11 Uiwang ICD Structure of Total Revenue in 2016 Logistics Business Lease : Yard, Reach Stacker, Cement Silo, Land Warehouse ICD Rent : Using the land of rail track Outbound Business Revenue ($) Ratio (%) Lease 26% Lease 2,896,851 26% Warehouse 808,485 7% ICD Rent 7,613,974 67% Others 28,708 0% Total 11,348, % Source : Korean Rail Road Corporation(KORAIL), ICD Rent 67% Warehouse 7% 10
12 Uiwang ICD Route by Cargo Type Container Major route Uiwang ICD Busan (Old & New Port) Gwangyang Port Annual Trade Volume in 2016 Measurement Outbound Inbound Ton 2.6 million 2 million TEU 221,486 TEU 176,586 TEU Source : Uiwang ICD, Source : Uiwang ICD,
13 Uiwang ICD Annual Trade Volume and Revenue by Origin-Destination(O/D) in 2016 O/D Volume (TEU) Outbound Inbound Total Revenue ($) Volume (TEU) Revenue ($) Volume (TEU) Revenue ($) Ratio (%) Busan New Port North 115,191 14,200,550 89,116 10,004, ,307 24,204, South 43,308 5,196,140 34,036 3,737,730 77,344 8,933, Busan Old Port 57,687 7,065,520 42,094 4,666,200 99,781 11,731, Gwangyang Port 4, ,200 11,003 1,310,580 15,584 1,878,780 4 Others , ,650 1,056 35,960 0 Total 221,486 27,055, ,586 19,729, ,072 46,785, Source : Korean Rail Road Corporation(KORAIL),
14 Uiwang ICD Route by Cargo Type Cement Major route Uiwang ICD Annual Trade Volume in 2016 Dodam-ri Ipseok-ri Ssangyong-ri Jecheon Donghae Measurement Inbound Car 63,776 cars Ton 3.3 million Source : Uiwang ICD, Source : Uiwang ICD,
15 Uiwang ICD Route by Cargo Type Steel Major route Uiwang ICD Pohang Gwangyang Annual Trade Volume in 2016 Measurement Car Ton Cold Steel 9,695 cars 470 thousand Source : Uiwang ICD, Inbound Hot Steel Others 559 cars 452 cars 27 thousand 16 thousand Source : Uiwang ICD,
16 Uiwang ICD Issues of Uiwang ICD Individual operation system Useless of integrated information system such as Electronic Data Interchange(EDI) No sharing and reporting information in advance between trucking company and ICD operator causes terminal congestion Therefore, 17 operators serve based on their own operation system(yard plan, stack direction, etc.) Lack of Container Yard(CY) No space for turning train in the terminal cause safety issue Max. 33 cars are acceptable in the terminal but rail operator increase the number of cars over 40 because of the economies of scale then, complicated load plan due to use of more than one track in each service Old equipment over 20 years of operation, maintenance problems 15
17 III. Yangsan ICD 16
18 Yangsan ICD Background To resolve traffic congestion in the city resulting from ODCY in Busan Old Port Off-dock system at Busan Old Port Opened in 2000, and rail transportation has been available since 2006 Build-Own operate-transfer(bot) total 10 blocks and 17 private/public operators Corporation Number Public 1 ODCY 10 Line 3 Transport 2 CY.CFS* 1 Total 17 Source : Ministry of Land, Infrastructure and Transport(MOLIT), Inland Logistics Hub in 5 Regions of Korea, Note(*) : CY(Container Yard), CFS(Container Freight Station) Source : Kim Byung Ki, A Study on the Reestablishment of the Function of Yangsan ICD,
19 Yangsan ICD Network Connect to Busan Old Port Route 1 (33km): Yangsan ICD-Gyeongbu highway-the first expressway-busan Port(General Port) Route 2 (38km): Yangsan ICD-Gupo,Yangsan highway-the second expressway-busan Port(Gamman) Route 3 (31km): Yangsan ICD-Gupo,Yangsan highway-baegyangsan tunnel-sujeongsan tunnel- Busan Port(Jasungdae) Source : Kim Byung Ki, A Study on the Reestablishment of the Function of Yangsan ICD,
20 Yangsan ICD Network Connect to Busan New Port Route 1 (37.8km): Yangsan ICD-Gupo,Yangsan highway-gonghang Ro-Local road 2-Busan New Port(BNP) Route 2 (49.1km): Yangsan ICD-Gupo,Yangsan highway-naengjeong JC-Garak IC-Gadeok IC-BNP Route 3 (34.6km): Yangsan ICD-Gupo,Yangsan highway-chojeong IC-Gadeok IC-BNP Source : Kim Byung Ki, A Study on the Reestablishment of the Function of Yangsan ICD,
21 Yangsan ICD Container Throughput The CY/CFS volume has been decreased since 2005 The CY volume s compound annual growth rate between 2005 and 2016 is -16% The CFS volume s compound annual growth rate between 2005 and 2016 is -8% Year CY CFS (thousand TEU) (thousand R/T) ,331 1, ,123 1, ,065 1, ,025 1, , , Source : Yangsan ICD, CY(thousand TEU) CFS(thousand R/T) Busan New Port opened with on-dock system in
22 Yangsan ICD Bulk Throughput The bulk volume has been increased since 2007 The bulk volume s compound annual growth rate between 2007 and 2016 is 74% Year Bulk (thousand TON) , , ,012 Source : Yangsan ICD, Bulk(thousand TON) 21
23 Yangsan ICD Issues of Yangsan ICD Decreased container throughput To resolve, adopted alteration of the purpose of use Implemented Act of development and operation of logistics facility ( ) By the law, construction of manufacturing and sales facility is possible in 25% of ICD area However, the practical development is difficult because of low level of upper limit of building-to-land ratio(20%) and environmental issue Area Building-to-Land ratio (%) Legal basis Current Metropolitan Uiwang ICD Honam Jangsung ICD Central Sejong ICD Yeongnam Chilgok ICD Busan Yangsan ICD Source: Lee Dong-Hun, Kim Yul-Seong, Shin Jae Yeong, and Park Ho, A study on the Revitalization of Yangsan ICD, Journal of Korea Port Economic Association, 2015, 31(4) pp
24 Yangsan ICD Issues of Yangsan ICD Deficit operation resulting from unexpected additional investment Improvement of soft ground ($53 million) and support for private investment sector ($54 million) cause deficit operation 2010: $3.2 million, 2011: $3.1 million, 2012: $2.7 million Inefficiency of operation resulting from highly fragmented operators 10 different blocks and 10 operators Operating independently Lack of provision consolidated level of marketing strategy, incentive, service, and etc. Policy restriction Policy for usage of land at Yangsan ICD changed to allow constructing facility by given limitation But, environmental issue to protect the green tract of land 23
25 IV. Dry Port Development in Asia-Pacific 24
26 Dry Port Development in Asia-Pacific Total 240 Dry Ports in 27 economies International Agreement on Dry Port in 2014 (Reason) Economic inequality was intensified among members of ESCAP (Objectives) International awareness of Dry Port, Attracting investment funds for Dry Port infrastructure, Increasing efficiency of logistics network between member countries 109 existing(including on-going) in Central Asia(Tajikistan, Pakistan, etc.) and Southeast Asia(India, Bangladesh, etc.) Planning 131 future development in Southeast Asia(Laos, Myanmar, etc.) and Europe(Turkey, Armenia, Developing Azerbaijan, etc.) Source : UN ESCAP( access
27 V. Lessons and Learned 26
28 Lessons and Learned Location Optimizing location concerns with distribution of industry and its development plan in mid- and long-term Prevent idling facility by changes in logistics flows Container Yard(CY) Securing sufficient CY and its appropriate plan Avoid additional investment and waste in short-term Unification of ownership and operation Encouraging sustainable investment on infrastructure and equipment Regardless of risk by contract issue 27
29 Lessons and Learned Operation system Integrating operation and information system on the initial stage of development Increasing operation efficiency and decreasing terminal congestion Deregulation Should avoid conflict of laws and regulations Regulation support by government Environment-friendly facility Equipment: automation, changes in power(electricity etc.) Yard Truck: changes in power(electricity etc.) 28
30 Thank you!
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