Economic Analysis for Investment of Public Sector’s Automated Container Terminal: Korean Case Study

Yohan An,Namkyu Park

doi:10.3390/jmse9050459

Abstract

The purpose of this case study is to conduct an economic analysis to calculate the proper terminal capacity of automated container terminal (ACT) investment from the perspective of the public sector. As a key element of smart port, the ACT is an important terminal operating facility for import/export and transshipment cargo between countries and must have facilities with sufficient capacity to load/unload export/import cargo in a timely manner according to the user’s request. Recently, the method of calculating the capacity of seaport infrastructure is changing from the method of applying the maximum capacity to the method of applying the proper capacity. Therefore, it is desirable to expand port facilities by investigating proper capacity rather than expanding port facilities based on the maximum performance. This study is a case study focusing on the new port of Busan introducing the ACT. From the perspective of national fiscal income and national economy from the ACT investment, this study determines the proper terminal capacity for each berth. As a result of economic analysis, the break-even terminal capacity to secure economic feasibility is from 544,272TEU of the nine berths to 600,138TEU of two berths applying a 2.96% discount ratio. In a sensitivity analysis considering the social discount rate and the change in the size of berths, the net present value has a positive value from a minimum of 530,000 TEU (nine berths with 1.96% social discount ratio) to a maximum of 620,000 TEU (three berths with 3.46% social discount ratio).

Highlights

The volume of containers around the world has increased rapidly over the decades and continues in the future [1]
In the era of continuous low growth after the global economic crisis and COVID-19, the port development strategy should be flexibly adjusted in cooperation with the government and the private sector, and the port development strategy should adopt the concept of the proper terminal capacity
We introduce the proper terminal capacity to test the economic analysis of automated container terminal (ACT)

Summary

Introduction

The volume of containers around the world has increased rapidly over the decades and continues in the future [1]. World-class ports such as Rotterdam, Hamburg, and Qingdao are promoting port development to cope with large-sized ships and mass freights logistics activities while simultaneously increasing port capacity and improving productivity [2]. In the era of continuous low growth after the global economic crisis and COVID-19, the port development strategy should be flexibly adjusted in cooperation with the government and the private sector, and the port development strategy should adopt the concept of the proper terminal capacity. United Nations Conference on Trade and Development (hereinafter UNCTAD) announces that ACT provides significant advantages in saving terminal labor costs, improving port capacity, reducing the energy consumption of port equipment, and enhancing the image of ports [6]. Economic evaluation of ACT development should be considered before any action is taken from the perspective of the public sector

Objectives

Methods

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Discussion

Conclusion