It has been found that the Japanese earthquake of 2011 has had a great effect on the sharp increase in Korea-Japan trade volume via the port of Busan. The outbound sea traffic to Japan last year surged by 27.4% from the previous year recording 39.58 million tons while Jan-May period this year showed up 7.5% with 17.59 million tons.

According to the report of 'One year after Japanese earthquake! The trend and prospect of logistics between Korea and Japan' published by the Korea International Trade Association(KITA), the rise in outbound traffic this year has important significance considering that the export traffic increased a lot between Mar. and Apr. last year due to special procurement demand for relief and rehabilitation supplies caused by the earthquake.

Meantime, the inbound sea traffic from Japan recorded 39.57 million tons, down 4.7% whereas the first half(until May) this year showed up 1.8%. The result indicates that the import sea traffic, which reduced in the aftermath of earthquake last year, has started to show signs of recovery.

It is particularly notable that 35.2%(6.2 million tons) in Jan-May export sea traffic accounted for transshipment cargo, up 9.9% from the previous year.

The recent analysis has found that the port of Busan is recognized as a disaster-free area and its container handling charge is 20~40% cheaper than Tokyo or Yokohama, which helped enhance the position of Busan as an export/import logistics hub port towards Japan.

As Busan New Port is reinforcing its competitiveness through introduction of latest unloading equipments and building logistics centers in the hinterland area, Japanese enterprises also express interest in entering this area.

Mr. Lee Byung Moo, a chief of the shipper & logistics department at KITA, stressed in this regard "The feasibility of connecting domestic ports with Japan's northeastern ports should be thoroughly analyzed and we need to use it preemptively. Aggressive marketing campaign to attract Japanese firms into the hinterlands of domestic ports has to be carried on as well."

Japan's eastern ports resume their operations

7 ports in Japan that were closed down since the earthquake have resumed their operations, 5 of which have connection with Korea-Japan route. There is also an increasing trend in export/import trade volume based on reopening of Japan's northeastern route after 3rd quarter 2011.

Namsung Shipping reopened the service to Japan's port of Sendai and Hachinohe respectively in last Sep. and Dec. The service to the port of Onahama, which experienced severe damage to the port facilities, was resumed in Apr. this year. Heung-A Shipping also started a calling to the port of Sendai in Mar. this year.

In line with resumption of east Japan service by national shipping lines, Japanese enterprises tend to take advantages of the port of Busan.

There are a couple of reasons why utilization rate for the port of Busan is on the rise. Those are, as forementioned, a recognition as a disaster-free area and 20~40% cheaper container handling charge compared with Tokyo or Yokohama. Such attractions of Busan as a hub port are boosting Japanese companies' advance to the hinterlands of New Port.

Operation in Korea-Japan route gets activated

Japan bound export traffic is expected to keep a strong and steady tone due to increase in outbound transshipment traffic. As eastern Japan route has been normalized since earthquake, the operation of Korea-Japan route is also predicted to rev up.

Some specialists say that domestic ports should take this opportunity to enhance their positions by properly responding to natural disasters  that occur in Japan. It is reported Japan's northeastern regions have traditionally used Yokohama as a hub port, however, there are some chances that Korean ports such as Busan will replace the position.

Relatively cheap land value and labor cost used to make Japan's northeastern area a popular U-turn site for their overseas enterprises but now it seems to be losing ground. Mr. Lee at KITA expressed his opinion "The Korean ports need to analyze the chances of attracting Japanese companies into their hinterlands. It should be focused on the increase in port traffic in the short term whereas engineering industry and environment-friendly energy industry also need to be targeted in the long term.