Construction of Smart Joint Logistics Centers in Busan and Incheon Port Hinterlands... Total Investment of 134 Billion KRW

Ministry of Oceans and Fisheries to Promote Construction with Busan and Incheon Port Authorities

Expected Effects: Creation of 2,400 New Jobs, 40,000 TEU Cargo Volume, and Annual Logistics Cost Savings of 2 Billion KRW

Blueprint for Operating a Smart Shared Logistics Center.

[Asia Economy Reporter Joo Sang-don] The Ministry of Oceans and Fisheries announced on the 7th that, together with Busan Port Authority and Incheon Port Authority, it will build smart joint logistics centers equipped with advanced digital logistics technologies at the Busan New Port Seacon Hinterland Complex and Incheon Port South Port Hinterland Complex (Aam Logistics Complex 2) by 2024.

The smart joint logistics centers are next-generation logistics centers that automatically manage inbound and outbound shipments and inventory through advanced logistics facilities and equipment such as robots, Internet of Things (IoT) sensors, and artificial intelligence, as well as operating systems. They also detect and prevent equipment failures in advance. Compared to existing logistics centers, the time to retrieve products from storage locations is reduced by 15%, operating costs are cut by more than 20%, and productivity increases by over 10%.

In export-import ports, it was common for cargo owners to directly install logistics centers that simply stored cargo. However, with the recent expansion of the e-commerce market and the activation of non-face-to-face economic activities due to COVID-19, cargo volumes have increased and product varieties have diversified, leading to growing demand for smart logistics centers that integrate advanced technologies to quickly process cargo and manage real-time inventory.

However, small and medium-sized enterprises (SMEs) located in port hinterland complexes have found it difficult to independently build and operate logistics centers due to high initial investment costs. They have hoped for joint logistics centers built and leased long-term by the government or public institutions. Accordingly, as part of the 'Korean New Deal Project,' the Ministry of Oceans and Fisheries plans to build two smart joint logistics centers at Incheon Port and Busan Port by 2024 to respond to changes in global logistics demand such as the expansion of e-commerce and to reduce the investment burden on SMEs.

The Busan Port smart joint logistics center will focus on securing new cargo volumes and promoting co-growth with small logistics companies by supporting SMEs and startups based on excellent port infrastructure. The Incheon Port smart joint logistics center aims to create added value through services such as ferry transport to China, Sea&Air linkage with Incheon Airport, and maritime express customs clearance systems.

A total of 134 billion KRW will be invested in building these logistics centers, including 40.2 billion KRW from the national government and 93.8 billion KRW from the port authorities. This year, 3.6 billion KRW has been allocated for the design and construction of the Incheon Port logistics center. Incheon Port Authority will start design this year and supply the logistics center by 2022, while Busan Port Authority will begin design next year and complete construction by 2024.

The Ministry of Oceans and Fisheries expects that once the smart joint logistics centers are built, they will reduce companies' cost burdens through joint shipping and delivery, and contribute to innovation across logistics companies by introducing smart technologies such as unmanned forklifts, multifunctional conveyor belts, and automated guided vehicles (AGVs). Additionally, the construction of the two smart joint logistics centers is expected to create approximately 2,400 new jobs, generate 40,000 TEU of cargo volume, and achieve annual logistics cost savings of about 2 billion KRW.

Considering that port-type smart joint logistics centers are being introduced domestically for the first time, the Ministry will closely collaborate with the port authorities to develop logistics platforms for operation and will also review and prepare support measures for tenant companies, including reasonable rent setting.

Kim Jun-seok, Director of the Shipping and Logistics Bureau at the Ministry of Oceans and Fisheries, said, "We expect that these smart joint logistics centers will contribute not only to reducing logistics costs but also to revitalizing port hinterland complexes. We will continue to discover and promote measures for the development of shipping ports, which account for 99.7% of Korea’s import and export logistics."

This content was produced with the assistance of AI translation services.