Since the introduction of the Terminal Operation Companies system (TOC) in Korea in January, cargo is handled faster but stevedoring costs are higher, shippers say.
"We paid less than market price (before TOC). But we no longer get it from newly-licensed TOCs. Also, we can no longer choose stevedoring companies,'' one cargo owner using Inchon port said. He used to pay US$3.80 per tonne of wood cargo, but now pays $5.96.
To make ports more competitive, the government has issued TOC licences to private companies at eight major ports since January.
Industry pundits are still unhappy with the government's partial involvement in port management.
The Federation of Korean Industries (FKI) claims that the government's involvement is a barrier to making ports profitable, competitive and efficient. The FKI urges the government to set up a private port authority that would be fully empowered to supply the currently unionised port labour, and determine port-using fees.
The FKI estimates that the nation would earn $1.38 billion in increased revenue annually from the fully-privatised management of the two existing ports in eastern Inchon and southern Pusan.
Half of the 250 shippers using Inchon and Pusan ports say they have been paying higher loading-unloading costs and have noticed little change in productivity since the introduction of the TOC system, the Korea Foreign Traders Association, an interest group of Korean traders, said.
Shippers are unhappy with government restrictions on bids for TOC licences. Many said that if they were allowed to, they would to form a consortium of stevedoring companies and shipping companies to bid for a TOC licence.
Meanwhile, Pusan and Kwangyang ports are projected to become northeast Asia's major trans-shipment hubs, experts said at a seminar hosted by the Korean Maritime Institute.
Pusan is well-positioned to handle trans-shipment of cargo from Russia and Japan. Kwangyang will handle rising cargo from north China.
The shallow sea depth off Chinese ports north of Shanghai limits big container traffic, but the sea depth off southern ports in South Korea is deep enough for big container ports, the experts said.
"The eventual railroad link between South and North Korea will give Korean ports an advantage over Kobe or Hong Kong,'' one industry pundit said.
The main reason for this is the shorter distance and cost-efficient transport via Korean ports from America, Europe or Asia to China or Russia. Korea's stevedoring cost is just one third of that at Kobe.
Korean insiders are keen on active port marketing, with simplified loading and transferring of cargo as well as an EDI link with major northern China, Japan and Russian ports. Trans-shipment cargo handled via Korean ports is projected to increase from 810,000 TEUs in 1996 to 4.08 million TEUs by 2011.