BUSAN- 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 car 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 ($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 pandemic, particularly a shortage of shipping containers.
Thousands of exporters like Dongkwang are struggling to move their goods through Busan, the world’s 7th busiest container port, where terminals handle over 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 US and European consumers, 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 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 this year even as exports soared 23.4 percent from a year earlier, according to data from the port authority, resulting in a very 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 Korea.
While the shipping squeeze caused by the pandemic is a global problem, the congestion at a transit hub like Busan has made things worse for smaller Korean exporters.
When Yantian, one of China’s busiest ports, was partially shut down in June 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,” said Lee at Dongkwang International, 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, according to Lee. — Reuters
