Vision of Incheon Port
Incheon Port currently connects the capital areas of South Korea with the world more closely through 46 container line services crossing Asia and Africa as well as the Americas, and the Incheon Port Authority (IPA) is the center of it.
The IPA has come up with its strategy to achieve a goal of boosting annual container throughput up to 3.5 million TEUs and annual passenger traffic up to 2.5 million by 2020. Based on it, the Incheon Port will turn into the logistics hub in the West Sea and the capital area and the mecca of marine tourism. It is also expected to herald a gateway to the world beyond Asia and become a business partner that leads to success of customers.
Business Korea had an exclusive interview with IPA president Nam Bong-hyun who makes an every effort to accomplish the vision. Followings are some excerpts from the interview.
Q:You have been in office around 100 days now. It is a bit late but please tell us how you feel about being elected as president of the IPA.
I can’t believe 100 days have already passed. Time really flies. I have been so busy trying to understand my field-based job and handle pending issues. In particular, I realized that the Incheon Port is a very attractive port with a high growth potential through my two business trips overseas to attract Chinese and Taiwanese shipping companies and U.S. refrigerated cargo shippers.
Personally, I am honored to be working at the Incheon Port which has more than 130 years of history. I also feels a sense of responsibility as president because it’s time to change and jump up to be the hub of logistics and marine tourism.
But, I am very proud to work for Incheon, my hometown, and I will become a CEO who takes the initiative for the dream of Incheon and future of the Incheon Port during my term.
Q:You were Deputy Minister for Planning and Coordination Office at Ministry of Oceans and Fisheries. As an Expert, please tell us the roles and functions of the Incheon Port and the Incheon Port Authority (IPA).
I had worked for the Ministry of Oceans and Fisheries for almost 30 years since 1985. As Deputy Minister for Planning and Coordination Office at Ministry of Oceans and Fisheries for two years, I was in charge of planning and coordinating the ocean and port sectors.
The Inchon Port is one of the largest ports in the metropolitan areas of South Korea. So, we will help fulfill its functions as an industrial port and turn into a popular marine tourist attraction at the same time.
The IPA is the one which develops and operates the Inchon Port. It is also a state-own company which has a high growth potential along with the Incheon Port. The Incheon Port handled less than 1 million TEU container cargos before the establishment of the IPA in 2015, but its cargo volume increased to 2.68 million TEUs last year. I think this is largely due to the hard work of IPA employees and executives as well as its good geopolitical position.
Q:In your inaugural address, you announced the vision for the Incheon Port to be a hub for logistics and marine tourism. Please tell us your practical strategies in detail.
I announced the vision to become a logistics hub at the West Sea and a marine tourism hub in order to express my will to contribute to the economic growth by boosting the port logistics and marine tourism industries. I will make an every effort to achieve the IPA’s goal to handle 3.5 million TEUs container cargos annually and record 2.5 million passengers by 2020.
For five practical strategies to accomplish the vision and goal, we will expand port infrastructure promptly and improve port functions first. We will also increase cargo volume which is the biggest task for the port to survive.
Thirdly, we will improve marine tourism infrastructure and services. Fourthly, we will focus on developing new growth engines in order to secure a future growth engine and come up with measures to diversify the profit systems.
Lastly, we will turn the Incheon Port into the landmark of Incheon and the marine tourism complex so we can recreate it as an urban hub port space.
Q:The Incheon Port posted 2.68 million TEUs in container volume last year, reaching an all-time high. What are your plans this year to increase the container volume?
We set a goal of this year’s container volume at 3 million TEUs. Based on the strengths of the Incheon New Port, we will actively attract and diversify new lines of ocean routes and Intra-Asia routes.
To this end, we will continuously carry out marketing campaigns to attract refrigerating and freezing logistics, high-value-added logistics such as beer, wine and foods, and bulk logistics including automotive components.
We will strengthen our promotions for major shipping companies, which play a crucial role in operating ships globally according to the reorganization of the global shipping market. We will explain them using the Incheon Port is much more economical.
Meanwhile, there are concerns that trade with China has decreased due to the deployment of the U.S. Terminal High Altitude Area Defense (THAAD) system. However, there is no significant change in terms of trade volume alone after the THAAD issue. Rather, the trade volume between South Korea and China this year has been on the rise to 25.56 percent in March and 20.3 percent in the first quarter.
Q:“Survival” is the most talked-about topic among every industry in an intense business environment. What is the IPA’s strategy to secure a future growth engine?
In addition to the Incheon New Port, the New International Passenger Terminal, cruise terminal and the Golden Harbor project, which are currently under development, we are planning to create refrigerating and freezing logistics clusters utilizing new eco-friendly LNG cold technology and automotive logistics clusters.
The refrigerating and freezing logistics clusters using the LNG cold energy is expected to realize a new business model that creates high added value, such as fresh goods manufacturing and processing, beyond a simple lucrative business model. We will receive an offer and select companies to be part of the clusters in September this year.
Moreover, we are planning to create automotive logistics clusters as container functions of South Port transferred to the Incheon New Port. A total of 500,000 cars were exported through the Incheon Port in 2016. In particular, the Incheon Port exported 200,000 used cars, accounting for 87 percent of the total used car exports in South Korea. We are seeking to secure stable container traffic at the Incheon Port by creating eco-friendly and advanced automotive clusters consisting of export facilities. We are aiming to run the clusters in 2021.
Notably, the automotive clusters will generate many macroeconomic effects with the construction investment of 100 billion won (US$89.48 million) such as 179.3 billion won (US$160.36 million) worth of production and 82.7 billion won (US$73.96 million) worth of added value. The clusters are expected to have more than 2,000 residents and over 3,000 of floating population a day, helping activate the business district in the neighborhood.
Q:You are making an effort to draw collective intelligence in a bid to respond to a fourth Industrial Revolution.
With a fourth Industrial Revolution, the advanced working environment armed with big data and artificial intelligence (AI) will appear in the port logistics sector as well. We will be able to see services like AI control tower for terminals, unmanned ships, 3D pilot chart and drone logistics in the near future.
The port logistics sector is expected to become smarter with the introduction of new technologies. However, human alienation is emerging as a new problem as human jobs are replacing with robots and AI systems.
Collective intelligence has also come up with based on the relationship between humans. In order to draw collective intelligence of the IPA, it is important to form cooperative relations between members. Accordingly, we will carry out campaigns called “Tearing Down Wall of Communication” so that we can strengthen communication and collaboration between divisions.
To make collective intelligence stronger, each individual needs to boost its intelligence. At the IPA, there are diverse business fields including port operation, port construction, financial management, legal systems and group management. Accordingly, it needs specialists in each sector as well as generalists as the businesses are organically connected.
To this end, we are planning to provide various professional and training programs by dividing into sectors like leadership, job, common competence and global competence. We will also help our employees have a wide range of experience and widen their vision through the job rotation system.