Shippers gain as Koreas come closer together

<p>Foreign affairs minister Alexander Downer welcomed the groundbreaking ceremony marking the start of construction on road and rail links between the two Koreas.</p> <p>The event on Wednesday &#8211 ending South Korea’s de facto status as an island &#8211 is another important step towards reconciliation, Mr Downer said last week.</p> <p>"Building transport links across both the west and east ends of the Demilitarized Zone is an important confidence-building measure," he said.</p> <p>Shipping lines plying trade between North and South Korea, on the two-day expensive voyage between the port of Incheon in the South aned Nampo in the North, will lose millions of dollars of cargo.</p> <p>In 2001, the task was 83,000 tonnes at a hefty cost of US$720-US$800 per teu.</p> <p>Most of this will now move to rail, Korean Shippers’ Council director Kim Kil-Sub said earlier this month.</p> <p>International lines could lose a portion of their lucrative Korea-Europe business because the reconnection of transport links would make overland delivery a more viable option, he said.</p> <p>The sea voyage from Pusan to Rotterdam takes 35 days while a sea and overland route via Vostochnvy and the Trans Siberian Railway (TSR) takes just 25 days.</p> <p>But only 5% of Korean cargoes to Europe are moved by rail and the cost is twice that of sea.</p> <p>"Reconnection of the rail lines between the two Koreas would mean cutting a lot of cost out of using the TSR and would save another two or three days," Mr Kim said.</p> <p>"This would make it a much more competitive option for shippers."</p> <p>Shipping and logistics players, including Maersk Sealand, have expressed interest in an overhaul of the TSR system when the cross-border links between the Koreas are completed.</p> <p>But there is an estimated US$7bn worth of modernising required for North Korea’s rundown 1,000 km rail section and the problem of a narrower Korean guage to overcome.</p> <br />