Current Status and Prospect of KORAIL Global Logistics Business G R F C 2007 March 23 2007 Kang, Gil-Hyun Senior Executive Director & Chairman, WCRR2008.

Current Status and Prospect of KORAIL Current Status and Prospect of KORAIL Global Logistics BusinessGlobal Logistics Business

G R F C 2007

March 23 2007March 23 2007

Kang, Gil-HyunKang, Gil-HyunSenior Executive DirectorSenior Executive Director

&&

Chairman, WCRR2008Chairman, WCRR2008

1. Current Status

2. Trend of Korean Import Export Logistics

3. Status and Potential of Inter-continental Corr

idors

4. Rail Infrastructure for Asian Landbridge

Contents

2

Overview of Railway Logistics (as of Overview of Railway Logistics (as of 2006)2006)Manpower Station Train

Runs Length Freight TrafficRevenue

Fleet

3,821* Station 1,304* Driver 2,517

233 3533,060k

m

43,340,000ton

319.5billion

Diesel Locomotive 381Electric

Locomotive141Freight Car

13,178

4334

3195

4589

3729

4990

4279

5688

5128

6770

6748

2500

3500

4500

5500

6500

7500

2006 2008 2010 2012 2015

( )수송량 만톤( )수입 억원

Status and Prospect of Railway Logistics freight TrafficStatus and Prospect of Railway Logistics freight Traffic

1. Current Status of Logistics Business

Freight Traffic (10 thousand ton)

Revenue (100 million KRW)

3

Freight Transport and Prospect Freight Transport and Prospect ( land 60( land 6070%, sea 70%, sea 101020% )20% )

61783155

1051

104534901

19231

21512

57926392

18

49617

4524

13199

43

52600

4167

11941

37

70543

5730

20600

60

105050

7730

29000

90

0

20000

40000

60000

80000

100000

120000

1970 1980 1990 2000 2005 2010 2020

Road Rail Ship Air

⇒ For the last 30 years, road extension rose by about 8times while rail remained with a only 1.5 time growth.


4

8,1196,962

5,0493,851

2,1982,056

1,6791,355

1,1551,1091,085

778708

5,630

광양제철선

광양항선여천선

괴동선

장생포

우암선

남부기지

1~1.5 million ton

over 8 million ton

6~7 million ton

5 million ton

3~4 million ton

2~2.5 million ton

Thousand ton

As of 2005

17%

12%

9%5%

19%

5%

4%

3%

3%

3%3%

13%

In-land Traffic Volume (by Lines)In-land Traffic Volume (by Lines)


Inland traffic concentrated in Seoul-Ulsan-Busan Line

Inland traffic concentrated in Seoul-Ulsan-Busan Line

Total traffic Volume

41,670,000 ton

2% decrease in last 5 years(Yearly average)

Total traffic Volume

41,670,000 ton

2% decrease in last 5 years(Yearly average)

5

Bukpyung Bukpyung

GwangyangGwangyang

Gwangyang SteelGwangyang Steel

YeocheonYeocheon

Southern FreightSouthern Freight

YoungdongYoungdong

CentralCentral

광양제철선

광양항선여천선

괴동선

장생포

우암선

남부기지

△4.1%

6.6%

△2.2%

△4.8%

△1.9%

△16.2%

△5.6%

Increase rate

fertilizer5,54013%

container10,034

24%

cement15,160

36%coal6,56616%

minerals1,967

5%

fuels2,402

6%

2001 2002 2003 2004 2005

Cement

Container

Coal

Mineral

Oil

Fertilizer

etc.

Ttraffic Volume by items (as of 2005, thousand ton)

Cement, Container, Coal, &Fertilizer are the main items of Freight Transport

Only Container traffic Increased

Cement, Container, Coal, &Fertilizer are the main items of Freight Transport

Only Container traffic Increased


In-land Traffic Volume (by Items)In-land Traffic Volume (by Items)

1~1.5 million ton

over 8 million ton

6~7 million ton

5 million ton

3~4 million ton

2~2.5 million ton

6

Traffic volume and Main items of Major Traffic volume and Main items of Major Harbors Harbors

129 116 119 44 122 105 75593 650 551 580 636 631 686

4,085 4,384 4,460 4,942 5,399 5,943 5,897

1999 2000 2001 2002 2003 2004 2005

1000 TEU

Ship Rail Road

Sea1%

Rail10%

Air89%

air78%

rail22%

sea0%

Container Traffic Volume at Busan Harbor

(by modes)

Container Traffic Volume at Busan Harbor

(by modes)

Container Traffic Volume at Kwangyang Harbor (by modes)

Container Traffic Volume at Kwangyang Harbor (by modes)

(Kwangyang Harbor) 2005

(Kwangyang Harbor) 2005

(Busan harbor) 2005

(Busan harbor) 2005

Container Traffic Volume by major harbors

Container Traffic Volume by major harbors

7,540 8,073 9,453 10,408 11,492 11,843642 855

1,0801,185

1,322 1,441

2000 2001 2002 2003 2004 2005

1000 TEU

Busan Gwangyang Incheon Ulsan etc.

Increased by 8.8 % Yearly

78%

9%8%

About 80% of container traffic volume is handled in Busan, Gwangyang, Ulsan, and Incheon harbor.

Rail traffic share is 10% at Busan, 20% in Gwangyang harbor


7

2 26 44 48 38 6 176 146 160 160 172 182 236

311406

486558

631769

839

1999 2000 2001 2002 2003 2004 2005

1000 TEU

Ship Rail Road

Evolution of Asia’s port throughputEvolution of Asia’s port throughput

9,123,515

1,621,923593,369 565,490 253,910

-

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

world Asia China Japan Republicof Korea

Source : Review of Developments in Transport in Asia and the Pacific (2005)Unit : USS Million

17% of World

17% of Asia


In the matter of cost, Asia accounts for about 18% of the world import –export volume, and Korea takes up about 16% of Asian export volume. In the Asian region, Northeastern Asia takes a high proportion.

8

PPort throughput by continents (Cargo volume of ort throughput by continents (Cargo volume of import and export)import and export)

126,033

47,395

33,610

33,190

10,971

7,017

2,946

78

132,475

120,628

16,198

25,095

72,972

24,513

6,784

96

아 시 아

중동

유럽

북미

대 양 주

중남미

아프리카

기타지역 ( )중량 천톤( )금액 백만물

146,914

52,853

44,789

14,987

12,241

6,203

6,018

415

74,745

10,794

14,569

6,031

4,599

3,692

3,305

169

아 시 아

유럽

북미

중남미

중동

아프리카

대 양 주

기타지역

( )중량 천톤( )금액 백만불

Import by continentImport by continent


Other Area

Africa

South America

Oceania

North America

Europe

Middle East

Asia

Other Area

Africa

South America

Oceania

North America

Europe

Middle East

Asia

Export by continentExport by continent

Export: 118 million ton (284 billion USD)Import: 399 million ton (261 billion USD)

Surplus : 23 billion USD (2005)

Weight ( 1000 ton)sum ( million USD)

Weight ( 1000 ton)sum ( million USD)

9

The major exporter and importer, The major exporter and importer, the U.S. Japan, and Chinathe U.S. Japan, and China

Take up about 46%. Take up about 46%. The trade with the U.S. and China The trade with the U.S. and China

record surplusrecord surpluswith $30.5bil. and S23.2bil. Respectivelywith $30.5bil. and S23.2bil. Respectively

but with Japan, $24.3bil. but with Japan, $24.3bil. Deficit is recorded. Deficit is recorded.

48,403

21,393

38,648

56,769

30,586

16,874 16,106

40,934

10,018

24,469

9,859

69,512

9,774

930

8,184

30,470

8,050

1,635

Japan USA UAE Germany Taiwan

( )금액 백만불( )중량 천톤

61,915

31,333

41,343

13,636

24,027

16,133 15,531

4,282

10,863

3,214

10,304

1,439

7,4073,622 5,339

6985,0465,027

China USK J apan Hong Kong Taiwan Germany Singapore UK Indonesia

( )금액 백만불( )중량 천톤

Source : KMI

Trend Import Export Volume by CountryTrend Import Export Volume by Country

Export to Major Countries

Import from Major Countries

Busan New Harbor


Weight ( 1000 ton)

sum ( million USD)

Weight ( 1000 ton)

sum ( million USD)

10

Oil41%

etc.31%

Coals14% Miner

als15%

Car17%

etc.47%

Oil 21%

Steel8%

Chemical 7%

Gwangyang20%

Busan17%

Incheon13%

Etc.28%

Ulsan22%

ExportExport

ImportImport

2006 Container Handling of Worlds’ 5 Biggest Harbors

2,480 2,374 2,171 1,8261,203

-

1,000

2,000

3,000

Singapre HongKong

Shanghai Shenzen Busan

Source : KMI

6,192 5,540

2,7173,708

4,675

9,09810,661

6,672

14,904

Busan Ulsan Gwangyang Incheon Etc.

Unit: 10,000ton

Exp

Imp

1,596

Busan port is one of the 5 ports in the world now, dealing with about 80% of the total container export volume, and as a terminal of Asian Landbridge, it will play an important role with the future TKR connection.


Import Export Trend by Major HarborsImport Export Trend by Major Harbors

11

Container Export through Busan HarborContainer Export through Busan Harbor


12

Busan

GYMasan

Vanino

Ulsan

Busan

GYMasan

Vanino

Ulsan

5%

54%

7% 3%

울산항 부산항 마산항 광양항

To Vostochiny Port

BusanTo Vladivostok

22%

6%

46%

6% 3%

울산 부산 마산 광양

BusanTo Korsakov Port

7%

From Vostonich

Busan

From Vladivostok

26%

Sokcho 3%

From KorshakovBusan

7%

From BaninoBusan

2%

112

35

102

79

37

93

보스토치니 블라디보스톡 코르샤코프 바니노

수출수입

The2005 record of export /import volume by port

Source : Korea Customs Service

Import/Export Volume to Fareast Russia : Import/Export Volume to Fareast Russia : (TSR)(TSR)

Export Volume(160000 TEU)Share by Harbors

Export Volume(160000 TEU)Share by Harbors

Apportioned rate of import volume [127000 TEU] by port Apportioned rate of import

volume [127000 TEU] by port

3. Status and Potential of Inter-continental Corridors

13

Ulsan Busan Masan Gwangyang Ulsan Busan Masan Gwangyang

Vostonich Vladivostok Korshakov Banino

ExportImport

Vostonich62%

Vladivostok

29%

Corshakov 7% Banino

2%

Current Status and Prospect of TSR Traffic Volume Current Status and Prospect of TSR Traffic Volume (1,000 TEU)(1,000 TEU)

ㅇ In case of Korea, it showed 26% average growth from 2000-2004, but following the TSR charge rise[30%] after 2005, the volume is on the declining trend.

(For each FEU from Busan to Finland : $3500~39004600~5000) - Charge adjustment and condition improvement was reflected from Feb. 2007, the volume is

expected to increase in 2007. ㅇ If competitiveness on freight charge on sea transportation, improvement of logistics

infrastructure such as freight car supply and port facility expansion, and simplification of customs could be acquired to optimize the TSR route, the volume is expected to increase by 700,000 TEU for the future.

49

110

52

8 8

75

188

109

27

9

154

64

9

125

0

20

40

60

80

100

120

140

160

2000 2001 2002 2003 2004 2005

KoreaChinaJapan


14

Rail-Ship-Rail Complex Logistics Business Rail-Ship-Rail Complex Logistics Business (Korea-Japan)(Korea-Japan)

TMGR TMRTSR

TCR

through TSR through sea

Distance (Km)

Duration (day)

fare($)Distance (Km)

Duration (day)

fare($)

Korea-Finland

11,000 16~22 4,600About 21,000

30 3,500

Comparison between TSR and Sea route (based on 1 FEU)

ㅇ Mainly by Surface (TKR is not linked yet)

ㅇ Main route : Busan, Gwangyang Vostonich TSR

ㅇ Other route : Incheon, PyeongTaek China TCR

ㅇ TSR Corridor : Korea65%, China30%, Japan5%

Korea(electronics), China(clothing), Japan(Carpart)

Current Main Route


15

Building Rail Infrastructure link with Building Rail Infrastructure link with ShippingShipping［ Port connection railway

Project Distance

(km)Period

Cost(100mil.won)

The new Busan port connection railway 3.1 ’03~’08 1,147

The new Busan beltline railway 9.4 ’06~’10 623

The western Kwangyang port connection railway 7.0 ’04~’09 1,762

< The plan to build high-speed logistics railway network>

The new Mokpo Port

KunJang Port

Donghae Port

The new Pocheol Harbor

The new Ulsan Port

Busan PortThe new Pusan Port

익산

여수

인천

의정부

서울

수원

전주

송정리

삼랑진

영천대구

김천대전

조치원

영주

사북제천

Sokcho Port

광양항

Pocheol Harbor

순천

부전

예산

보성

한림정진영

경부선호남선군산

- The new Busan port and Kwangyang port was completed with the branch line.


16

To build rail-exclusive CY and integrated freight To build rail-exclusive CY and integrated freight terminal terminal

익산

여수

인천

의정부

서울

수원

전주

송정리

삼랑진

영천대구

김천대전

조치원

영주

사북제천

순천

부전

예산

보성

한림정진영

경부선호남선군산

150,000TEU

150,000TEU

100,000TEU container

170,000TEU

KwangyangPort

Busan Port

Metropolitan (Gunpo, EuiWang)

Honam Region(JangSung)

Central Region(Chungwon, Yeongi)

Busan (Yangsan)

Youngnam Region(Chilgok)

Northern Metropolitan (Paju)

Under operation : 3 integrated terminals: Gunpo, EuiwangICD(’93)Yangsan(’00)Jangsung(’05)

Under construction : 3 integrated terminals-Cheongwon(’09), Chilgok(‘09), Paju(’11)

Rail exclusive CYRail exclusive CYIntegrated freight

terminal Integrated freight

terminal

3mil. Ton of General freight

5mil.ton

3.6mil.ton

5mil.ton

4mil. ton

2mil.ton

Susaek Station Integrated logistics base

Gumi Rail CY , Yakmok station

Sinchangwon station CY

Hanam station CY


17

Gyeongju

Daejonjochajang

OkchunDongdaegu

Shindong

Siheung

GoyangDeport

Iksan

SeoDaejon

Gwangju

Mokpo

KwangMyung

Sonjungri

CheonanAsan

Seoul

DongdaeguDongdaegu

BusanBusan

DaejeonDaejeon

SeoulSeoul

Routes Phase 1Phase 2

ㅇ Container transportation volume of Kyeongbu line container is around 660,000TEU

ㅇ If operation is done centering on CVL cargo train after the 2nd phase KTX in 2011, 1.9mil. TEU at maximum can be transported.

　 The remaining capacity of 38times from Suwon to Chonan could be used to operate 54 trains, with one-way trip daily.

(round trip 108 trains *30 cars*2TEU*300day=1.94mil. TEU)

ㅇ To bolster logistics infrastructure of Kyeongbu likne, expansion of CY and to use continuous welded rail [CWR] will be proceeded together.

Expansion of CY (Centering on Yakmok, Sojeongri, and Hwadeok CY) // CWR: main line clearance distance : increased 400~500M 600M

To increase the capacity of Kyeongbu line in the case of the 2To increase the capacity of Kyeongbu line in the case of the 2ndnd ph phase KTXase KTX


288148

361 396

781

547402

899 841

625

947

477

188 250162 203 156

239157 207

483

765

336

611 558

984

703 641

1,056 1,048 1,108

'95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05년도

천톤→남 북→북 남 총 물동량

5,8486,795

19 13 111 173 187 195 287 252 308 222333 425 403

642 724 697

1,056

0

500

1,000

1,500

'89 '90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05년도

$1mi. 13% average growth yearly

Cargo volume between North Korea and South Cargo volume between North Korea and South Korea Korea

(Size of trade and trend of cargo volume)(Size of trade and trend of cargo volume)Route of North→South Volume

87%1.7%3%

2.8%

80~90%

10~15%

1~5%

1% 이하

Trend of Variation on inter-Korea trade amount by year

Trend of Variation on inter-Korea trade amount by year


19

South North

North South

Total Volume

1000 ton

The trend of cargo volume by year [ship]

The trend of cargo volume by year [ship]

To promote the inter-Korean railway connection To promote the inter-Korean railway connection

Jaejin Station

Dorasan Station

Connection of track and station construction of Kyeongui line(Dorasan-Kaesung), and Donghaeline(Jaejin-Kumkangsan) is mostly completed.

To promote trail operation of train and full commencement for commercial operation in the future.


20

China

Russia

UIWANG ICD

OSAKA

Seoul(Euiwang) →Busan (rail transport : 6hrs) - Shuttle, Clearance, Shipment : 18H Busan →Hakada (by sea : 8hrs) - loading, clearance, Shuttle : 5H Hakada → Tokyo (rail transport: 22hrs

To introduce the rail-sea-rail international To introduce the rail-sea-rail international integrated transport business between Korea and integrated transport business between Korea and JapanJapan

Busanjin Station CY

HAKATA

TokyoJR 22hrs ( 5hrs for custom clearance)8hrs by sea (18hrs)

Korail 6hrs


21

Korea

Japan

ㅇ To promote connected transportation through the strategic alliance between KORAIL, JR Freight, ltd.

And ship builders

ㅇ Using 12’container, on-time transportation between Seoul and Tokyo within 60 hrs. [5days by sea]

ㅇ Trial transportation in ’07 and commercial operation in Apr. ’07 is planned.

□ □ On-discussion Business between Korea to China On-discussion Business between Korea to China (Train ferry project between Korea-China)(Train ferry project between Korea-China)

Incheon Harbor Pyungtaek Harbor

ㅇ Target Section: To review the promotion of the train ferry project between Incheon, [Pyeongtak]-YeonTae[Wihae], China

□ □ Project in Feasibility Study (Undersea Tunnel Korea-Project in Feasibility Study (Undersea Tunnel Korea-Japan)Japan) ㅇ A Large scale project between

Kyushu ~ Iki Island ~ Tsushima Island ~ Guejae Island (235km)


22

KoreaBusan

Masan

Guejae

Tsushima

IkiJapan

Karatsu

Route Plan of K-J Undersea Tunnel

To estmiate demand in connection of inter-Korean and Continental railway

Classification 2006 2010 2015 2020

Inter-Korean trade

414 598 1,269 1,943

Connection to Continent

3,905 5,137 8,447 10,812

Total 4,319 5,735 9,716 12,755

※ Source: Korea Traffic Research Center <Research on traffic demand and cost analysis on inter-Korean railway>, 2005

ㅇ Freight Transportation volume (unit: 1,000ton/yearly)

Dream of Asian LandbridgeDream of Asian Landbridge


23

WCRR 2008 in SeoulWCRR 2008 in Seoul

88thth World Congress on Railway Research World Congress on Railway ResearchMay 18 ~22 Seoul, KoreaMay 18 ~22 Seoul, Korea

Please Submit Abstract Please Submit Abstract

by May 16, 2007by May 16, 2007

Thank you !

Current Status and Prospect of KORAIL Global Logistics Business G R F C 2007 March 23 2007 Kang, Gil-Hyun Senior Executive Director & Chairman, WCRR2008.

Documents

overview of railway

prospect land

land traffic volume

freight transport

asian landbridgecontents

billiondiesel locomotive

road extension

tonthousand tonas