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A Study on the Linkage of Railroad & Shipping to Strengthen Logistics

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A Study on the Linkage of Railroad & Shipping to Strengthen Logistics A Study on the Linkage of Railroad & Shipping to Strengthen Logistics Competitiveness in Korea S. Lee, J.K. Yoo, K.T. Kim, D.S. Moon Korea Railroad Research Institute, Uiwang-City, Korea Abstract Due to logistics cost being a major component of national competitiveness, efficient freight transportation by multimodal transport is needed to save transportation cost and time. This paper deals with the efficient linkage of railroad and shipping to save on logistics costs and improve national competitiveness in Korea. First of all, the operation status of the train-ferry in Europe and China and the trade status of Korea, Japan and China are discussed. The northeast Asian logistics system which linked railroad and shipping is recommended for Korea in order to play an important role as the logistics hub in northeast Asia, to cut down logistics cost and to reinforce national competitiveness. The train-ferry system will contribute to revitalize railroad freight transportation and develop the multimodal logistics system. 1. Introduction Logistics cost is a major component of national competitiveness because of fast-growing freight volume between nations due to continued economic growth and the expansion of trade volume. Transportation cost, which is the largest part of logistics cost, has particular effect on the whole logistics cost. Therefore, efficient freight transportation by multimodal transport is needed to save transportation cost and time. The train-ferry system is the economical multimodal transport method that integrates efficiency and mass transportation by combining shipping with railroads. This system is an efficient transport method because it ensures connections of transportation in areas which are disconnected by geographical barriers such as lake, river, sea, and so on. Due to the rapid economic growth of developing countries such as Korea, Singapore, Hong Kong, Indonesia and Malaysia, and the introduction of market economy in China, Asia has been in the spotlight. Northeast Asian economies such as Korea, Japan and China are leaders in the rapid growth of the economy in Asia. The major characteristic of Asian trade is the large increase in the rate of intra-trade in relation to economic growth and industry development. Among the whole export and import amount of Korea, Japan and China, the rate of intra-export volume is 20.2% and the rate of intra-import is 27.6%. For this reason, economic cooperation between intra-countries is very important to the Asian economic bloc and the efficient construction of an international logistics system is needed. Because of the geographical conditions and complementary trade structure of Korea, Japan and China and the rapid economic growth in China, a train-ferry system contributes to the revitalization of freight transportation by rail and the improvement of multimodal transport system in northeast Asia. The train-ferry system is expected that Korea play an important role in multimodal transport system connecting Korea, Japan and China as well as providing efficient transportation between Korea, Japan and China. Therefore this paper deals with the operation status of train-ferry, the trade status of Korea, Japan and China and efficient linkage of railroad and shipping to save the logistics cost and improve national competitiveness in Korea. 2. Operation status of train-ferry and implications 2.1 Operation status of train-ferry in Europe Train-ferry transportation systems of loading freight cars into ships are a world-wide transportation system. More than 100 train-ferries are operated in 25 countries with 30 lines. The range of operation distance is from 200km to 800km, and that of cruise time is from 10 hours to 20 hours. The minimum distance of train-ferry line operated in Europe is generally 100 miles until now. This is caused by the needs of combining geographical influence in Europe and the advantages of train-ferry. When carriers freight goods by trucks in Baltic Sea area, they must pass the national borders of countries many times. But, if they use train-ferry, they sharply reduce the number of passing of national borders. Another advantage of train-ferry lies in the fact that it saves transportations of goods. Freight cars can be loaded to ferry directly and unloaded from ferry directly. Where fragile goods are concerned all risks of breakage by handling at the ports are avoided. Perishable goods also derive considerable benefit from a train-ferry. The main routes of train-ferry in Europe are located in three regions. In the Baltic Sea, Finland, Lithuania, Sweden and Germany are connected by train-ferry. Sea routes are significantly shorter than land routes in this area. The advantage is that carriers using train-ferry can avoid crossing the other nations’ borders. In the Mediterranean Sea, train-ferry connecting two islands (Italy and Sicily, Sardinia) is operated. In the Black Sea, Rumania, Ukraine, Turkey and Georgia are connected by train-ferry. There are two reasons connecting by train-ferry in this area. The first one is to connect to Asian railway network, and the second one is land transportation by railway is difficult. Area Line Note relatively short distance, Puttgarden – Rodby economic feasibility Sassnitz(Mukran) – Trelleborg Rostock – Trelleborg Baltic Sea Swinoujscie – Ystad Lubeck – Travemunde – Malmo Stockholm – Turku/Abo Sassnitz(Mukran) – Klaipeda Lubeck – Travemunde – Turku/Abo Connecting the Mediterranean VS Giovani – Messina passenger service Sea Civitavecchia – Golfo Aranci linking an Sardinia Island Constantza – Istanbul Ilichevsk(Odesa) – Varna Black Sea Constantza – Samsun Ilichevsk(Odesa) – Poti/Batumi Constantza – Poti/Batumi Table 1: Train-ferry line operated in Europe The train-ferry is seen at its best in the Baltic Sea. The reasons of the growth of transportation by train-ferry between the three nations (Sweden, Norway and Finland) of the Scandinavian Peninsula and the nations of the European Continent can be summarized into two viewpoints. The first is geographical condition carriers must cross the Baltic Sea to freight goods. The second relates to efficiency at the bottleneck. Reducing entire transportation time, it is essential to save time at the ports originated freight transshipment. Figure 1: Train-ferry in Travemunde Port, Germany 2.2 Operation status of train-ferry in China China has promoted a Dalian-Yantai train-ferry project as a part of rail construction project from northeast China to Yangtze River Delta region. After the exhibition run was performed in November 2006, three train-ferry ships are operating. By 2010, 8 train-ferry ships will be transporting about 10 million tons of freights for a year. In contrast to the length of the railways connecting the two cities via Bohai Bay Rim, the distance between Yantai and Dalian over sea is only 159.8km. As a consequence of train-ferry, the transportation distance is reduced over 1,000km in comparison with an existing long-distance train connecting northeast area to Shantung. This train-ferry enables to reduction of transportation cost and time between Yantai and Dalian and improves the capacity in a main railroad connecting north to south. Also, the train-ferry brings on the development of economic growth through the integration of northeast China, the Bohai Bay area and Yangtze River Delta area which makes up 86% of Chinese economy. Figure 2: Dalian-Yantai train-ferry The Qiongzhou Straits train-ferry connecting Hainan to Chinese mainland was completed in late 2002 and is operating since January 7, 2003. This project is the first train-ferry system and is promoted as part of a rail construction project from Guangdong to Hainan. The distance of Qiongzhou Straits train- ferry connecting Hainan to Guangdong is 22.5km, and two train-ferry ships are operating which can carry trains, cars and passengers at once. Figure 3: Qiongzhou Straits train-ferry 2.3 Implications of train-ferry system As the train-ferry is shown in Europe and China, the train-ferry system is the most efficient and economic transport method and provides a connection of transportation in the area disconnected by geographical conditions of lake, river, sea, and so on. Recently, the train-ferry system is substituted by the competitive facilities such as tunnels and bridges under development of bridge and tunnel technology and increase of demand. However, the new train- ferry lines are established in the Baltic Sea and the train-ferry system is regarded as a major transport method in Germany and Sweden as environmental issues by freight transportation are considered to be significant. Considering the geographical conditions of Northeast Asia that a large bay is formed between Korea and China and Japan is separated by the Continent of Asia, it is important for Korea, Japan and China to connect by railroad directly. Despite the disconnection between South and North Korea by railroad, South Korea can connect to Trans-China Railway (TCR) using the train-ferry between Korea and China. It can reduce the distance about 1,000km rather than connecting of a railroad line passing through North Korea. And then Japan is also enabled to connect the Continent of Asia by the train-ferry system linked to Korea. The train-ferry system can be a starting point of the northeast Asian business community, and it is expected that the logistics costs between Korea, Japan and China be reduced on a large scale and economic cooperation be revitalized. 3. Trade status of Korea, Japan and China The trade volume of Asian economic bloc has increased gradually. The trade volume of Asian economic bloc was 5,922 billion dollars in 2005 and sharing about 27.9% of the total world trade volume. Among the trade volume of Asian economic bloc, the trade volume of the northeast Asian economy consisted of Korea, Japan and China was 2,672 billion dollars and sharing about 14.4% of the total world trade volume. According to rapid growth of the economy in China, the importance of the northeast Asian economy has increased steadily in an international market and it is expected that the northeast Asian economy grows the economic volume of the world with North America and Europe in the future.
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