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Peace in Korea brings expectation to expanded logistics opportunities by Railway
Thinking back the historical meeting held in April between North and South Korea has been attracting huge attention over the world. This discussion has risen anticipation of peace in the East Asian region but, also of positive effects on economic growth. Logistics is considered as one of the business getting the biggest benefits from it.
During this summit, reconstruction plan of Trans-Korean Railway was back on the table, which has been pending for many years due to sustained conflict among Korea peninsula and the allies. The project has concept of connecting both Korea and even to China and Europe. On the other hand, this past June, Russian President Putin and South Korean President Moon presented the idea on investing to link Trans-Siberian Railway with Trans-Korean Railway through North Korea.
These kinds of movement to build new infrastructures across countries are expected to lead changes in trends of transportation method in Asian region. Korea, especially South Korea, has been one of the biggest trading partners in Asia by taking part in shipments of 1,242 million tons for international freight transport in 2016. Though the main means of transport goods to and from South Korea has been limited to ocean shipment (99.7%), followed by air freight (0.3%) because there is no other option to get through North Korea territory.
However, newly built infrastructure will enable the increase in volume of railway transportation to the other Asia and European countries. Compared to ocean freight or air freight, railway transportation allows to have benefit from keeping cost effectiveness and flexibility. Also, utilizing railway can be helpful for avoiding risk of delayed shipments- stopping at congested ports- such as Shanghai or Hong Kong. Once the world’s longest railroad is established it is expected to become able to ship goods between Europe and Korea 3 times faster.
“New Economic Map” suggested by Minister of Unification, Republic of Korea includes the goal of building economic belts covering Korea, China and Russia which aim to encourage more business trade and to improve exchange systems. There are still long to way to actualize the huge scaled construction plan of infrastructures over multiple countries with 900 billion US dollar scheme, we would be able to anticipate potential effects on logistics business around Asia, which will be resulted from each step to establish peace in Korea.
Contributor: Kim Hana
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References:
S. Nathan Park, “An Ingenious Plan to Modernize North Korea's Trains,” CityLab, 4th May. 2018 https://www.citylab.com/transportation/2018/05/inter-korean-summit-rail-project/559652/
Xinhua, “Putin, Moon Discuss Projects To Connect Korea With Russia”, teleSUR, 22nd Jun. 2018 https://www.telesurtv.net/english/news/Putin-Moon-Discuss-Projects-To-Connect-Korea-With-Russia-20180622-0022.html
“Russia to extend Trans-Eurasian rail project to Korea”, RT, 6th Jun. 2014 https://www.rt.com/business/164116-russia-railway-north-korea/
“Annual Domestic & International Freight Transport by Mode”(2016), Korean Statistical Information Service, 4th May. 2018 http://kosis.kr/statHtml/statHtml.do?orgId=116&tblId=DT_MLTM_662&conn_path=I2&language=en