PA causes logistic costs increase

As the Port Authority System introduction has been rather untimely and will produce huge port logistic costs, port authority laws and legislation must be delayed or abolished, said an official at one shipping association.

The Korea Harbor Transportation Association revealed that though 99 lawmakers, including Rep. Son Tae-in, proposed new port authority laws, the system introduction might cause greater logistic costs. Project results show that the system has to be introduced gradually, said the association. It also asked 100 lawmakers from the main opposition Grand National Party (GNP) to postpone PA legislation or abolish it altogether.

In the report the association released to lawmakers, the Port Authority introduction would cause port fees to increase, worsening the export industry, and bite into profitability. It may also torpedo hopes of creating a Northeast Asian logistic hub port as there would be no real benefits to attract transit cargoes from nearby countries.

"Huge financing will be needed to change the port labor system and pay for lay-off compensation and retirement pay. However, the new port authority won't be able to afford it," said the association.

"In addition, the Pusan and Inchon ports are operated according to two systems: dedicated terminals to manage and repair terminals, and terminal operating companies. If a port authority is introduced, it will require huge manpower and will have to transfer to port users. So the port authority would fly-in-the-face-of the government’s privatization policy,” added the association.