Competition Level Between Shanghai Port and Busan Port
Introduction
Shanghai Port is located in the front edge of the Yangtze River Delta and it becomes the first busiest container port in the world whereas Busan Port which is located in the southern part of the Korean peninsula ranked the fifth. Both ports handle approximately 90% of the total container throughput, and they are also the major hubs of the seaborne transportation in the world (World Port Source 2013a, World Port Source 2013b).
This essay will discuss the level of competition between Busan Port and Shanghai Port, and identify the external factors that should be considered by both ports’ management in developing their strategic development plans.
Level of competition
The late growth of China on a global scale in recent years has affected on both Busan Port and Shanghai Port in several levels of competition. There are three key competitions between them which are geographical positioning, transshipment capabilities and low comparative costs.
In terms of geographical positioning, Busan Port has become an appropriate choice due to its location between Japan and China. It has 15m water depth and planning to increase up to 17m in 2020, and its world class infrastructure allows the calling of mega large vessels. Furthermore, Busan Port has 41 container berths and systematic connections for global logistics corporations to help save costs and time, so it can act as a feeder hub aiming for small ports for a majority of North-East Asian transshipment carriers. For example, inland transport in Northern China will be expensive and inconvenient, thus exporters or importers choose to transport their shipments to Busan Port first then Shanghai Port (BPA 2013).
On the other hand, China created Shanghai as a finance shipping hub because Shanghai is a port city. It became an international maritime capital because it focused on economic instead of political logic (BPA 2013). Similarly, both Shanghai Port and Busan Port are part of the main trunk line functioning as
Shanghai Port is located in the front edge of the Yangtze River Delta and it becomes the first busiest container port in the world whereas Busan Port which is located in the southern part of the Korean peninsula ranked the fifth. Both ports handle approximately 90% of the total container throughput, and they are also the major hubs of the seaborne transportation in the world (World Port Source 2013a, World Port Source 2013b).
This essay will discuss the level of competition between Busan Port and Shanghai Port, and identify the external factors that should be considered by both ports’ management in developing their strategic development plans.
Level of competition
The late growth of China on a global scale in recent years has affected on both Busan Port and Shanghai Port in several levels of competition. There are three key competitions between them which are geographical positioning, transshipment capabilities and low comparative costs.
In terms of geographical positioning, Busan Port has become an appropriate choice due to its location between Japan and China. It has 15m water depth and planning to increase up to 17m in 2020, and its world class infrastructure allows the calling of mega large vessels. Furthermore, Busan Port has 41 container berths and systematic connections for global logistics corporations to help save costs and time, so it can act as a feeder hub aiming for small ports for a majority of North-East Asian transshipment carriers. For example, inland transport in Northern China will be expensive and inconvenient, thus exporters or importers choose to transport their shipments to Busan Port first then Shanghai Port (BPA 2013).
On the other hand, China created Shanghai as a finance shipping hub because Shanghai is a port city. It became an international maritime capital because it focused on economic instead of political logic (BPA 2013). Similarly, both Shanghai Port and Busan Port are part of the main trunk line functioning as