Study On The Demand And Development Of International Truck Freight Between South Korea And Shandong Province

The enterprises from South Korea and Japan have been moving their manufacturing departments to the east coast of China in recent years. Based on comparative advantages, establishing cities group in Shandong peninsula as a strategic objective was proposed by Shandong province in 2003, this aim to plan and form"interactive zone in production industry"among Shandong province, South Korea and Japan, so as to promote the cooperation among them. Therefore, it has significance for Shandong province to realize the developing strategy by starting automobile ferrying between South Korean and Shandong province.1. The significance of starting automobile ferrying between South Korean and Shandong provinceStarting automobile ferrying between South Korean and Shandong province can correspond with the developing strategy in Shandong province, promote the trade between South Korean and Shandong province, lead to investment from South Korea in Shandong province, meet the transport demand of consigners, improve the profit of relative ports and shipping companies, develop the highway industry, unique agricultural industry and travel industry in Shandong province, benefit social and economic development around Shandong province, be more compatible with international economy, deepen the cultural interchange between China and South Korea, and strengthen the united force both from national and regional.2. The current situation of the study both from home and abroadThe ferrying mode has been developing rapidly since the 70's in 20th century. There are three ferrying markets in China including southern, eastern and Huangbo sea. The two ferrying transport lines across Bohai strait and Qiongzhou strait are called"Blue Expressways", they merge with the highway network and play an important role.The ferrying transport in Europe is very popular. The international ferryingbetween South Korea and Japan in Asia contributed a lot for the development of economy of the two countries.In recent years, China signed bilateral transport agreements with countries around her, and has been developing transport cooperation with them comprehensively and stably.3. The trade situation and freight transport situation prediction from both Shandong province and South KoreaThe foreign investment value is 11.03 billion US dollars in 2003, increased by 69.2% in recent years, the cooperation between South Korea and Shandong province developed smoothly in most of sectors. The trade value between South Korea and Shandong province is 15.55 billion USD, the investment from South Korea agreed by Shandong government are 3320 projects, the investment capital by agreement is 11.39 billion USD including the 3.57 billion USD which were already in use in 2005According to the prediction, the trade value between South Korea and Shandong province will increase dramatically within the next 5 years; it will increase 24.5% annually and will reach 46.6 billion USD by the end of 2010. There are many shipping lines link ports which transport cargo to and from the two sides: the ports in Shandong province side are Qingdao, Yantai, Shidao, Rongcheng, Rizhao; the ports in South Korea side are Pusan, Inchon, Pyongtaek and Kunsan. There are two mode of freight transport including full container line and passenger/freight line, the transport capacity is 5128TEU/year and 266656TEU/year respectively.According to the prediction, the trade value between South Korea and Shandong province will increase dramatically within the next 5 years; it will increase 24.5% annually and will reach 46.6 billion USD by the end of 2010.According to the prediction, the container transport volume between South Korea and Shandong province will increase dramatically within the next 5 years; it will increase 12.69% annually and will reach 310000 TEU by the end of 2010.4.The feasibility study on automobile ferrying between South Korean and Shandong provinceStarting automobile ferrying between South Korean and Shandong province will attract some goods such as time sensitive and low elastics of demand-price. goods volume transported by containers between South Korea and Shandong province approximately takes up 40% of total.Both South Korea and Shandong province have good transportation infrastructure, and intensive highway network. The length of expressway in Shandong province is over 3000 kilometers; South Korea has many famous international ports, so does in Shandong province; The standards of trucking vehicles are almost the same between the two sides, this feature is very convenient to develop international automobile ferrying; especially the traffic regulations are similar in both sides, e.g. drivers drive along to the right side of a road, therefore drivers from any country to another foreign country can accustom himself/herself to new environment shortly.The transport capacity of shipping lines between South Korea and Shandong province is not full used, operating automobile ferrying can make profit, provided the capacity of ship cabin is full used, the automobile ferrying cost will increase 11.3% comparing Vehicle plus Container Trailers with Wheeled Containers; while The automobile ferrying cost for 40 feet containers will increase 9.5% comparing Vehicle plus Container Trailers with Wheeled Containers.The entire time starting from Jinan through Weihai to Inchon then reach Shou'er is about 120 hours, while it is 64 hours transporting by passenger ferrying ship, time transporting by automobile ferrying ship takes up 40 hours or so which is 33% by whole containers ship and 63% by passenger ferrying ship.5.The technological plan to establish freight express corridor between South Korea and Shandong province.The models of international automobile transport are: both drivers and whole vehicle go through border; vehicle goes though border while drivers don't;and semitrailor goes though border while both drivers and traitors don't. after careful study on the paper, the model of drivers and whole vehicle go through border is reasonable, by doing this, both service level and efficiency can be enhanced, therefore, both drivers and whole vehicle go through border should be adopted in the project of automobile ferrying between South Korea and Shandong province.Considering the total trade volume and container transport turnover happened between South Korea and Shandong province, based on freight amount, geographic location, the density of highway network and higher speed using highway transporting mode.We should designate Weihai as the first port in Shandong to develop international automobile ferrying between South Korea and Shandong province at the first stage, while South Korea could choose Inchon to do so accordingly to form the first shipping line of automobile ferrying. With ongoing freight turnover of automobile ferrying, the ports of Qingdao, Yantai Pusan and Pyongtaek should be further opened up as the ports of international automobile ferrying.Weihai port should become more functional, to set up an exclusive passage for automobile ferrying trucks directly embark ferrying ships. The exclusive passage should have the functions such as customs handling, border inspection, goods inspection, quarantine inspection and international trucking inspection.According to the regulation of"Rule of direct Customs Clearance at Quays", the port of Inchon could be designated as an exclusive passage for international automobile ferrying, from the South Korean side.Because 90% of Shandong's total trade volume and investment with South Korea happened between South Korea and Shandong Peninsula, so the two lines of Jinan～Zibo～Weifang～Yantai～Weihai and Jinan～Zibo～Weifang～Qingdao～Weihai should be designated for developing automobile ferrying between South Korea and Shandong province at interim stage.In South Korean,the two lines of Inchon～Soeul～Chunchon and Seoul～Taejon～Pusan should be opened.There are two inland ports located in Jinan and Weifang in the Shandong peninsula. The inland ports should attach to coastal ports, as convenient processing passage, and goods centers for foreign trade, at the same time the inland ports should coordinate with organizations such as customs, border inspection, commercial inspection, quarantine inspection efficiently, eventually form an economical and convenient model of"direct customs clearance".6.Suggestions and policy analysis of carrying out international automobile ferrying between South Korea and Shandong provinceIt is possible to develop international automobile ferrying between South Korea and Shandong province under current law system and policy. But China doesn't join in , driver's licences are not permited by each other side, in the mean time, some problems still are not solved such as procedures are so redundant and timecosuming.In order to develop the automobile ferrying, the paper suggests that the two governments should sign an agreement of accepting driver's licence from both sides and join in , establish the cooperation mechenism and make out the regulation suitable for international automobile ferrying between South Korea and Shandong province.7. Conclusion and suggestionsAs a new mode of transportation, there are many issues such as national benefits and security to be discussed and negotiated carefully by South Korea, China, and Shandong province. it is good for us to reach some agreements earlier based on equality, fairness, mutual benefits.It is comprehensive and systemic to develop international trucking between South Korea and Shandong province.The governmental all levels should prepare very well to coordinate many organizations related to foreign trade, security, military, quarantine inspection, build efficient working offices and suitable operating mechanism to make sure that every one has his certain liability, coordinate with each other effectively.