Unable to get a slot on a container vessel, Lee Sang-hoon is considering using fishing trawlers docked for repair in the South Korean port of Busan to meet surging export orders for the engine oil he sells to Russia.
“China is the black hole in this shipping crisis, all the carriers are headed there,” said Lee, owner of Dongkwang International Co in Busan, which makes about 20 billion won (US$17.60 million) in annual revenue.
“Those fishing boats out there could be an answer for us, because we’re already one month behind schedule. That is, if we can iron out packaging issues,” Lee said, pointing out to empty fishing trawlers visible from his Busan office.
Booking trawlers is one way businesses in the world’s seventh-largest exporting nation are trying to overcome critical bottlenecks caused by the COVID-19 pandemic, particularly a shortage of shipping containers.
Thousands of exporters like Dongkwang are struggling to move their goods through Busan, the world’s seventh-busiest container port, where terminals handle more than 59,000 containers daily to process about 75 percent of all shipping for the country.
As global carriers race to deliver everything from furniture to toys to the US and European, they prioritize much larger batches of cargo waiting to be picked up along China’s factory belt over Busan.
That leaves fewer vessels in the South Korean port and a glut of them in China, cargo managers at Busan’s terminals said.
“As many [ships] depart from China where factories are mostly fully in operation, there’s little vessel space left by the time they stop in Busan,” said Lee Eung-hyuk, a marketing director at Busan Port Authority.
Some do not stop in Busan at all. The number of incoming container ships in Busan fell almost 10 percent through May, even as exports soared 23.4 percent from a year earlier, port authority data showed, resulting in an uneven recovery for Asia’s fourth-largest economy.
On a real-time map of the world’s major vessels at a control tower operated by HMM Co, the country’s biggest container carrier, most of the red and yellow dots show its alliance fleet concentrated around China and Singapore, not South Korea.
While the shipping squeeze caused is a global problem, the congestion at a transit hub like Busan has made things worse for smaller South Korean exporters.
When Yantian, one of China’s busiest ports, was partially shut down last month to control virus cases, some cargo was diverted to neighboring ports such as Busan, worsening the backlogs and periodic delays.
“It’s a transit hub with so many in and outs. We need to ship 30 containers a month, but have only been able to secure about 70 percent to 80 percent of that,” Lee said, adding that his company recently raised prices due to higher shipping costs.
Carriers sometimes refuse to accept bookings at all, or force customers to accept much higher spot rates, he said.
The pain is most acutely felt on less-popular routes that smaller firms often use, making shipping rates from Busan to Vladivostok, Russia, rise faster than to the US’ west coast, for example.
Dongkwang is paying US$2,200 per twenty-foot equivalent units for the route, up about six times from a year earlier.
For South Korea’s larger industrials like Samsung Electronics Co and LG Electronics Inc, the shipping squeeze is not as dire, because carriers tend to prioritize orders from customers with deep pockets and a larger volume of goods to be shipped.
To provide relief, the South Korean government has helped finance HMM orders for more containers and expanded cash handouts to support affected small-to-medium exporters.
At Busan’s New Port, terminal congestion is clearly visible.
At one of the five new terminals, outbound containers full of goods were stacked to their vertical limits.
Transit vessels carrying thousands of containers were being unloaded by automated cranes, which use artificial intelligence to find space for the steel boxes.
Every 10 seconds, a truck carrying a 20-foot or 40-foot container passes through the gate, taking them to warehouses, which already seem bursting at the seams.
SHARES DOWN: The top 10 companies all decreased in market value last year, due to COVID-19, Russia’s invasion of Ukraine, rising interest rates and global inflation Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) retained the top spot among the largest companies in the Asian supply chain in terms of market capitalization, Digitimes Research said. Citing its Asia Supply Chain Market Cap 100 rankings for last year, the research firm last week said TSMC’s market cap was US$378.45 billion, the highest among Asian suppliers, although it dropped by nearly US$200 billion during the year. The 34.3 percent fall in TSMC’s market cap was the largest decline of any company in the survey last year, but was typical of how many top-ranking companies fared. The top 10 in Digitimes’ rankings all saw
Sex worker Nina relies on an apartment in the Turkish city of Istanbul as a relatively safe space to meet clients, but the 29-year-old is worried about making enough to cover the rent after the landlord doubled the price. As a surge in inflation fuels a housing crisis in Turkey, LGBTQ+ sex workers like Nina say landlords are forcing them to accept huge rent hikes for fear of being evicted. Nina, who uses the pronouns they and them, worries about how they will pay the increased monthly rent of 8,000 Turkish lira (US$425.11) on top of rising bills. “There are gas, electricity, water,
Hon Hai Technology Group (鴻海科技集團), also known as Foxconn Technology Group (富士康科技集團) internationally, yesterday said it was confident that its performance would improve in the second half of this year. Investment plans related to electric vehicles (EVs) in different parts of the world are expected to gradually start coming to fruition, Hon Hai chairman Young Liu (劉揚偉) told reporters after leading a new year’s prayer at the company’s headquarters in New Taipei City’s Tucheng District (土城). Major challenges stemming from the COVID-19 pandemic and the Russia-Ukraine war continue to affect the global economy. However, Liu said that he expects a turnaround in
Singapore is seeing an influx of ultra-wealthy families from China looking to protect their wealth from a government that increasingly views them with suspicion. The Chinese Communist Party’s recent crackdowns on tech billionaires and tax-shy celebrities, as well as three years of “zero COVID” policies, have led many rich Chinese to look for a safe haven. Nervous over the fate of their fortunes, some of the country’s mega-rich have since booked tickets to Singapore, insiders said. The key Asian financial hub ticks all the boxes for relocating tycoons. Singapore has been ruled by one party for the past six decades, and labor strikes and