Current Status and Prospect of KORAIL Global Logistics Business

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G R F C 2007
Current Status and Prospect of KORAIL Global
Logistics Business
Kang, Gil-Hyun Senior Executive
Director Chairman, WCRR2008
March 23 2007
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Contents

1. Current Status
2. Trend of Korean Import Export Logistics
3. Status and Potential of Inter-continental
   Corridors
4. Rail Infrastructure for Asian Landbridge

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1. Current Status of Logistics Business

• Overview of Railway Logistics (as of 2006)

Manpower Station Train Runs Length Freight Traffic Revenue Fleet
3,821 Station 1,304 Driver 2,517 233 353 3,060km 43,340,000ton 319.5billion Diesel Locomotive 381 Electric Locomotive141 Freight Car 13,178

• Status and Prospect of Railway Logistics freight
  Traffic

Freight Traffic (10 thousand ton)
Revenue (100 million KRW)
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1. Current Status of Logistics Business

• Freight Transport and Prospect ( land 60?70,
  sea 10?20 )

? For the last 30 years, road extension rose by
about 8times while rail remained with a only 1.5
time growth.
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1. Current Status of Logistics Business

• In-land Traffic Volume (by Lines)

Total traffic Volume 41,670,000 ton 2 decrease
in last 5 years(Yearly average)
Inland traffic concentrated in Seoul-Ulsan-Busan
Line
????
over 8 million ton
67 million ton
5 million ton
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Bukpyung Gwangyang Gwangyang Steel Yeocheon South
ern Freight Youngdong Central
34 million ton
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3
22.5 million ton
Thousand ton As of 2005
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3
11.5 million ton
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5
5
9
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12
?????
17
???
19
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1. Current Status of Logistics Business

• In-land Traffic Volume (by Items)

• Cement, Container, Coal, Fertilizer are the main
  items of Freight Transport
• Only Container traffic Increased

Ttraffic Volume by items (as of 2005, thousand
ton)
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1. Current Status of Logistics Business

• Traffic volume and Main items of Major Harbors

• About 80 of container traffic volume is handled
  in Busan, Gwangyang, Ulsan, and Incheon harbor.
• Rail traffic share is 10 at Busan, 20 in
  Gwangyang harbor

Container Traffic Volume at Busan Harbor (by
modes)
Container Traffic Volume at Kwangyang Harbor (by
modes)
(Kwangyang Harbor) 2005
(Busan harbor) 2005
Container Traffic Volume by major harbors
Increased by 8.8 Yearly
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78
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2. Trend of Korean Import Export Logistics

• Evolution of Asias port throughput

In the matter of cost, Asia accounts for about
18 of the world import export volume, and Korea
takes up about 16 of Asian export volume. In the
Asian region, Northeastern Asia takes a high
proportion.
17 of World
17 of Asia
Source Review of Developments in Transport
in Asia and the Pacific (2005) Unit
USS Million
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2. Trend of Korean Import Export Logistics

• Port throughput by continents (Cargo volume of
  import and export)

Import by continent
Other Area Africa South America Oceania North
America Europe Middle East Asia
Weight ( 1000 ton)
sum ( million USD)
Export by continent
Other Area Africa South America Oceania North
America Europe Middle East Asia
Export 118 million ton (284 billion USD) Import
399 million ton (261 billion USD) Surplus 23
billion USD (2005)
Weight ( 1000 ton)
sum ( million USD)
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2. Trend of Korean Import Export Logistics

• Trend Import Export Volume by Country

Export to Major Countries
sum ( million USD)
Weight ( 1000 ton)
Busan New Harbor
The major exporter and importer, the U.S. Japan,
and China Take up about 46. The trade with the
U.S. and China record surplus with 30.5bil. and
S23.2bil. Respectively but with Japan, 24.3bil.
Deficit is recorded.
Import from Major Countries
sum ( million USD)
Weight ( 1000 ton)
Source KMI
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2. Trend of Korean Import Export Logistics

• Import Export Trend by Major Harbors

Busan port is one of the 5 ports in the world
now, dealing with about 80 of the total
container export volume, and as a terminal of
Asian Landbridge, it will play an important role
with the future TKR connection.
2006 Container Handling of Worlds 5 Biggest
Harbors
Source KMI
Ulsan
Etc.
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Gwangyang
Busan
Incheon
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13
Export
14,904
Import
10,661
9,098
Unit 10,000ton
6,672
6,192
5,540
4,675
3,708
2,717
1,596
Busan
Ulsan
Gwangyang
Incheon
Etc.
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2. Trend of Korean Import Export Logistics

• Container Export through Busan Harbor

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3. Status and Potential of Inter-continental
Corridors

• Import/Export Volume to Fareast Russia (TSR)

Export Volume(160000 TEU) Share by Harbors
Apportioned rate of import volume 127000 TEU by
port
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Busan
From Korshakov
Ulsan Busan Masan Gwangyang
Ulsan Busan Masan Gwangyang
From Vostonich
To Vostochiny Port
Banino 2
7
Export Import
Corshakov
Vladivostok
Vostonich
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Source Korea Customs Service
Vostonich Vladivostok
Korshakov Banino
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3. Status and Potential of Inter-continental
Corridors

• Current Status and Prospect of TSR Traffic
  Volume (1,000 TEU)

? In case of Korea, it showed 26 average growth
from 2000-2004, but following the TSR charge
rise30 after 2005, the volume is on the
declining trend. (For each FEU from Busan to
Finland 35003900?46005000)
- Charge adjustment and condition improvement
was reflected from Feb. 2007, the volume is
expected to increase in 2007. ? If
competitiveness on freight charge on sea
transportation, improvement of logistics
infrastructure such as freight car supply and
port facility expansion, and simplification of
customs could be acquired to optimize the TSR
route, the volume is expected to increase by
700,000 TEU for the future.
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3. Status and Potential of Inter-continental
Corridors

• Rail-Ship-Rail Complex Logistics Business
  (Korea-Japan)

TSR
TMR
TMGR
TCR
Current Main Route

• ? Mainly by Surface (TKR is not linked yet)
• ? Main route Busan, Gwangyang ? Vostonich ?
  TSR
• ? Other route Incheon, PyeongTaek ? China ?
  TCR
• ? TSR Corridor Korea65, China30, Japan5
• Korea(electronics), China(clothing),
  Japan(Carpart)

Comparison between TSR and Sea route (based on 1
FEU)
through TSR through TSR through TSR through sea through sea through sea
Distance (Km) Duration (day) fare() Distance (Km) Duration (day) fare()
Korea-Finland 11,000 1622 4,600 About 21,000 30 3,500
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4. Rail Infrastructure for Asian Landbridge

• Building Rail Infrastructure link with Shipping

Port connection railway

• The new Busan port and Kwangyang port was
  completed with the branch line.

lt The plan to build high-speed logistics railway
networkgt
Project Distance (km) Period Cost(100mil.won)
The new Busan port connection railway 3.1 0308 1,147
The new Busan beltline railway 9.4 0610 623
The western Kwangyang port connection railway 7.0 0409 1,762
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4. Rail Infrastructure for Asian Landbridge

• To build rail-exclusive CY and integrated
  freight terminal

Integrated freight terminal
Rail exclusive CY

• Under operation 3 integrated terminals Gunpo,
  EuiwangICD(93)Yangsan(00)Jangsung(05)
• Under construction 3 integrated
  terminals-Cheongwon(09), Chilgok(09), Paju(11)

Susaek Station Integrated logistics base
100,000TEU container
Northern Metropolitan (Paju)
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3mil. Ton of General freight
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Metropolitan (Gunpo, EuiWang)
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5mil.ton
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Youngnam Region(Chilgok)
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Central Region(Chungwon, Yeongi)
3.6mil.ton
2mil.ton
???
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Gumi Rail CY , Yakmok station
4mil. ton
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170,000TEU
Busan (Yangsan)
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Honam Region(JangSung)
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Busan Port
5mil.ton
Hanam station CY
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150,000TEU
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Kwangyang Port
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Sinchangwon station CY
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150,000TEU
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4. Rail Infrastructure for Asian Landbridge

• To increase the capacity of Kyeongbu line in the
  case of the 2nd phase KTX

?Container transportation volume of Kyeongbu line
container is around 660,000TEU ? If operation is
done centering on CVL cargo train after the 2nd
phase KTX in 2011, 1.9mil. TEU at maximum can be
transported. The remaining capacity of
38times from Suwon to Chonan could be used to
operate 54 trains, with one-way trip daily.
(round trip 108 trains 30 cars2TEU300day1.94mi
l. TEU) ? To bolster logistics infrastructure
of Kyeongbu likne, expansion of CY and to use
continuous welded rail CWR will be proceeded
together. Expansion of CY (Centering on
Yakmok, Sojeongri, and Hwadeok CY) // CWR main
line clearance distance increased 400500M ?
600M
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4. Rail Infrastructure for Asian Landbridge

• Cargo volume between North Korea and South Korea
  
• (Size of trade and trend of cargo volume)

Trend of Variation on inter-Korea trade amount by
year
The trend of cargo volume by year ship
1000 ton
South ? North
North ? South
Total Volume
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4. Rail Infrastructure for Asian Landbridge

• To promote the inter-Korean railway connection

Russia
China
Dorasan Station
Jaejin Station

• Connection of track and station construction of
  Kyeongui line(Dorasan-Kaesung), and
  Donghaeline(Jaejin-Kumkangsan) is mostly
  completed.
• To promote trail operation of train and full
  commencement for commercial operation in the
  future.

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4. Rail Infrastructure for Asian Landbridge

• To introduce the rail-sea-rail international
  integrated transport business between Korea and
  Japan

? To promote connected transportation through
the strategic alliance between KORAIL, JR
Freight, ltd. And ship builders ? Using
12container, on-time transportation between
Seoul and Tokyo within 60 hrs. 5days by sea ?
Trial transportation in 07 and commercial
operation in Apr. 07 is planned.
Korea
Japan
UIWANG ICD
Tokyo
JR 22hrs ( 5hrs for custom clearance)
8hrs by sea (18hrs)
OSAKA
Busanjin Station CY

• Seoul(Euiwang) ?Busan (rail transport 6hrs)
• - Shuttle, Clearance, Shipment 18H
• Busan ?Hakada (by sea 8hrs)
• - loading, clearance, Shuttle 5H
• Hakada ? Tokyo (rail transport 22hrs

Korail 6hrs
HAKATA
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4. Rail Infrastructure for Asian Landbridge
? On-discussion Business between Korea to China
(Train ferry project between Korea-China)
? Target Section To review the promotion of the
train ferry project between Incheon,
Pyeongtak-YeonTaeWihae, China
Incheon Harbor
Pyungtaek Harbor
? Project in Feasibility Study (Undersea Tunnel
Korea-Japan)
? A Large scale project between Kyushu Iki
Island Tsushima Island Guejae Island (235km)
Route Plan of K-J Undersea Tunnel
Busan
Korea
Tsushima
Masan
Japan
Iki
Guejae
Karatsu
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4. Rail Infrastructure for Asian Landbridge

• To estmiate demand in connection of inter-Korean
  and Continental railway

? Freight Transportation volume
(unit 1,000ton/yearly)
Classification 2006 2010 2015 2020
Inter-Korean trade 414 598 1,269 1,943
Connection to Continent 3,905 5,137 8,447 10,812
Total 4,319 5,735 9,716 12,755
? Source Korea Traffic Research Center
ltResearch on traffic demand and cost analysis on
inter-Korean railwaygt, 2005
Dream of Asian Landbridge
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WCRR 2008 in Seoul
8th World Congress on Railway Research May 18 22
Seoul, Korea
Please Submit Abstract by May 16, 2007
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Thank you !