Strong change for container terminals in Pusan

This year, the Port of Pusan met with a great deal of change in the area of container-dedicated terminals.

As the Kamman expansion terminal opens this April, some cargoes will migrate over there. Overseas port operating companies will take over management authority on the Hyundai Pusan Container Terminal (HBCT) and some parts of the Kamman Terminal. With the establishment of the Port Authority system (PA), PECT will become wholly privatized.

The Kamman expansion terminal, completed by the end of last year and now undergoing test operations, can handle 480,000 TEU on an yearly basis, docking two 50,000 ton vessels and one 5,000 ton vessel simultaneously.

With the expansion terminal open, the number of container dedicated terminals increased to five from four and handling capacities grew to 4.08 million TEU from 3.78 million TEU per year.

The Pusan East Container Terminal is most likely to be affected by the Kamman expansion terminal. PECT will be hit with a 20% cargo decrease. A significant portion of that hit come from Evergreen moving to the Kamman expansion terminal; they have handled 20,000 TEU annually through PECT. The HBCT is also vulnerable to cargo losses with overseas shipping companies relocating to the Kamman expansion terminal.

As might be expected, PECT may aggressively pursue Chinese transit cargoes to make up for the loss, giving rise to severe competition among container terminals in the Port of Pusan. HBCT operating rights are likely to go over to Hutchison Port Holding or P&O Ports in the near future, allowing overseas companies to participate for the first time since 1978 when the container-dedicated terminal opened. HBCT handles about 1.2 million TEU of cargoes on a yearly basis. These overseas operating companies will likely have significant influence on the way domestic companies’ operate terminals. Especially, it is expected to influence other terminals’ cargo volumes as they connect large shipping companies and operate global terminals.

In addition, the Korea Container Terminal Authority, the largest share-holder with 25% of all stock, is considering selling its shares and stevedoring facilities in order to privatize PECT. This drew much attention from domestic stevedoring companies.

An officer at the KCTA said, “Though it is just in the consideration stage, it looks like the PA establishment will go through. Serious competition will result because many overseas companies want to secure terminal space in the Port of Pusan.”