Due to the marine transportation market recession caused by the global financial crisis in 2009, container terminal operators began to take on business competition to attract shipping companies and secure quantity of transportation.
Such business competition caused downsizing of terminal operation and thus has also become the opportunity to save labor costs, renew equipment, improve productivity using IT and reduce raw costs.
Excessive business competition, however, among terminal operators led to rate drop competition with dropping below the service costs. Thus, the operating income of most terminal operators have grown worse compared to the past so that there are terminals complaining of difficulty in operation.
In this study, the raw cost analysis was executed to diagnose and evaluate the level of rate and the problems for different parts were analyzed to draw improvement plans for such.
For this, based on the 2009 H terminal service cost data, the overall container terminal cost of Busan port in 2011 was estimated, and as the result, the unit cost per 1TEU was calculated to be KRW 49,824 (labor cost 5% raise was assumed).
And the collected 2011 Busan port market rate was, for North Port, KRW 65,550 per 1TEU for import/export and KRW 46,000 per 1TEU for other port transhipment, and for New Port, it was KRW 88,550 per 1TEU for import/export and KRW 75,750 per 1TEU for other port transhipment.
Comparing such rate of North Port and New Port in Busan, it was judged that New Port was maintaining an appropriate level of rate for import/export and transhipment compared to the service cost. On the other hand, for North Port, it could be seen that the rate for import/export compared to service cost was higher than the cost, but the transhipment rate was lower than the cost.
Such phenomenon is expected to be a big obstacle to rate stabilization of North Port container terminal in future due to open low-price bidding by foreign shipping companies and reduction of transportation quantity.
In this study, in order to resolve such problems of container terminal rate, the following rate stabilization plan was proposed: first, the method by governmental regulations and law amendments; second, rent reduction through transportation quantity linked rent system method or a separate incentive reimbursement; third, introduction of port pooling system; fourth, mixed type of transportation quantity linked rent system method and port pooling system; lastly, increased size of container terminal operator. It is positively judged that through good utilization of these five, the rate of North Port can also be stabilized and thus the competitiveness of Busan port can be consistently maintained.
This study objectively estimates the service cost of Busan container terminals based on precedent research data, and compares to the current rate level to evaluate whether it is appropriate or not. And it is significant in that, along with the evaluation of rate level, the problems of current rate were diagnosed and a rational system improvement plan to resolve such was proposed.