[AirUP, On Site] Production Induction Effect of 650 Billion KRW... Busan New Port Lays Foundation for Smart Port

Domestic Container Crane
Stage 2-5, Pier No. 3 Arrival
Acceleration of Cargo Handling Equipment Localization
Preliminary Feasibility Study Completed for 40 Units

Busan Port Authority has completed the on-site installation of domestic container cranes No. 1 and 2, which will be operated at the Busan New Port South Container Phase 2-5 berth. (Photo by Busan Port Authority)

Busan Port Authority (BPA) is accelerating the localization of cargo handling equipment at Busan New Port. Through equipment localization, it aims to lay the foundation for building a Korean-style smart port that is fully designed and operated with domestic technology.

According to BPA on the 10th, the authority completed the delivery of the third domestically produced container crane to the Busan New Port West Container Terminal Phase 2-5 berth (New Port Pier 7) on the same day. This is the third crane made with Korean technology, following the sequential delivery of the first and second cranes last month. After a commissioning period, installation will be completed next year, and the cranes will be fully deployed in line with the opening of the Phase 2-5 berth.

Crane equipment is broadly divided into two types. Container cranes (CC) are installed on the quay wall (the section where ships dock adjacent to the port sea) to load and unload containers between ships and land, while transfer cranes (TC) mainly handle container movement within the yard (the area for storing and handing over containers). The introduction of cranes 1 through 3 is significant as it marks the first installation of domestically produced container cranes at Busan Port in 12 years since November 2010.

The decline of domestic cargo handling equipment is largely due to the aggressive low-price competition from Chinese products. Over the past decade, Chinese equipment, which guarantees performance at a lower price, has rapidly replaced domestic equipment. According to BPA, as of June this year, out of a total of 378 cranes at the existing Busan New Port (Piers 1-6), only 53 units (18%) are domestic. Moreover, all of these are transfer cranes, with no domestically produced container cranes in operation. This has caused a prolonged stagnation in the domestic cargo handling equipment industry. BPA’s localization project aims to revitalize this stagnant industry. As part of strengthening the competitiveness of the domestic materials, parts, and equipment (SoBuJang) industry, BPA plans to promote localization of cargo handling equipment to stimulate the regional economy and create jobs.

Since the second half of 2019, BPA has been actively advancing the Phase 2-5 project at Busan New Port West Container Terminal over 42 months until June next year, investing 295.8 billion KRW. Hyundai Infrastructure Solutions and HJ·Doosan Heavy Industries have been commissioned to manufacture 9 domestic container cranes and 46 transfer cranes, respectively. The domestically produced container cranes introduced this time are dual-trolley type remote-controlled cranes recently deployed at advanced ports such as Rotterdam Port in the Netherlands and Long Beach Port in the United States, expected to significantly enhance operational efficiency.

Additionally, BPA has completed a preliminary feasibility study for the introduction of 40 domestic cranes in the Phase 2-6 berth cargo handling equipment project at the New Port West Container Terminal. If all planned domestic cranes are introduced by the opening of the Phase 2-6 berth in 2026, BPA expects the proportion of domestically produced equipment at Busan New Port to reach 30%. The localization ratio of cargo handling equipment parts is also expected to rise sharply. Among the latest cargo handling equipment introduced before the localization project, the proportion of domestic parts was 7%, but it is projected to rapidly replace Chinese parts and reach 87% by next year.

The economic ripple effects of equipment localization are also expected to be substantial. BPA analyzed that the production inducement effect for the Phase 2-5 berth alone will reach 641.7 billion KRW, with added value of 211 billion KRW. Furthermore, the project is expected to create about 2,400 new jobs for port equipment production, and maintenance effects within the port industry will amount to 89 billion KRW over 20 years.

However, construction of the Phase 2-5 berth, scheduled for completion in July next year, has been partially delayed due to issues such as ready-mixed concrete supply, raising concerns about attracting shipping lines for operation. In response, BPA plans to closely coordinate operational plans and schedules with the West Container Terminal Opening Preparation Council and operating companies. Kang Jun-seok, BPA President, said, "Busan Port, the second largest transshipment hub in Northeast Asia, has mostly imported foreign-made cargo handling equipment. This project will serve as a catalyst for building a Korean-style smart port made and operated with our own technology."