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“Foster Korea’s signature port-logistics player”
Interview/Shon, Kwan Soo, Chairman of KOPLA
Friday, April 15, 2016, 17:39:40 Paul Yoon
“Fairly recently, China has been growing at a staggering rapid space in the global port logistics markets. However, there is no single Korea private port-logistics (PL) player ranked within the world-top twenty, let alone the world-top ten. Isn’t it the time now that Korea should bring up a Korea’s signature PL player at least?”

Chairman Shon, Kwan Soo of Korea Port Logistics Association (KOPLA) said above at an interview on last Apr. 8 with Korea’s shipping journals, referring to the latest rapid changes taking place in the global PL markets as well as to the growth of Chinese stevedoring players, adding with an emphasis that Korea needs to lift up a signature private PL player.

Chairman Shon, Kwan Soo indicated: “CJ Korea Express, Korea’s largest PL player is the world-ranked 26th with its annual revenue of 5 trillion won. It should level it up to as high as 20t won sale to be ranked within the world-top ten. There is no other alternative than to revitalize the M&A market in the long run in a bid to give a birth to a PL player with an annual sale of 20t won. The government is lately pushing for integration of PL players into Terminal Operation Corp. (TOC) in each port in an effort to increase loading-unloading (LU) productivity by avoiding cut-throat competition. It’s considered necessary to sustain most optimized M&A in each port.”

Chairman Shon stressed that since it’s a role for the Korea’s PL players to size up their business and upgrade their competitive edge eventually by means of M&A, their own voluntary efforts-making is very important along with the need for the government to set-up LU market’s standards.

Since the government changed in 1997 stevedoring licensing system from ‘approval’ to ‘registration’, the number of registered PL players grew 138% from 170 to 405 with their stevedoring capacity rapidly expanded by 191% while their annual cargo traffics ending up increased 128% from 426 million mt to 1.54 billion mt. These led to a deep unbalance in stevedoring supply and demand and a big disorder in Korea’s PL markets, raising the need for the government to redeem the markets order, it is pointed out.

Korean PL players will be geared up at least to compete in overseas markets provided that the government should balance the stevedoring supply and demand in Korea by reassessing its stevedoring capacity, and that the government should improve the health of domestic stevedore market at the stabilized tariff rates by expanding stevedore registration and stevedoring standard contract system, Chairman Shon considers.

Chairman Shon continued: “Following the switch to stevedore registration system, stevedoring capacity grew into surplus, resulting in increasingly excessive competition among PL players. The cut-throat competition lowers stevedore rates eventually leading to the woes of the overseas outflow of national wealth. We will join forces with the government to strengthen stevedore registration qualification and assess appropriate stevedoring capability under the amended laws and decrees.”

Also, Chairman Shon expressed his big worries about the latest transfer of management rights to Busan Newport to foreign interests. Recalling the inevitable situation at the initial stage of Busan Newport development that the foreign capitals and foreign operators were involved, it is a very big national loss to transfer 80% or more of its management rights to foreign players.

It would be very irresponsible on the part of the government to transfer to foreign players the domestic markets without any plan, and the government should set up a master plan enabling domestic PL service providers to be prepared for their prioritized participation in domestic stevedoring works, Chairman Shon indicated.
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