Evaluation Study of the Sea-Land Routes in the Northeast Asia

Priority Sector : Transport
Timeframe: 2012- 2013
Estimated Budget : USD 25,000
Source of Funding: Korea Maritime Institute
Project Status: ongoing

Background

There are multiple sea-land transport routes/lines in the Northeast Asia (NEA), based on international ferry services. Most of them connect China and ROK to Japan and located in Bohai Bay, Yellow Sea and East China Sea. At the same time, international ferries are not common for East Sea/Sea of Japan; there are few of them between Russia, China, ROK and Japan, the best known are:

 NEA Ferry Route: Sokcho (ROK) – Niigata (Japan) – Zarubino (Russia) – Hunchun (China);
 DBS Cruise Ferry:  Sakaiminato (Japan) – Donghae (ROK) – Vladivostok (Russia).

These routes are public-private regional joint ventures, use short and promising itineraries and have a great potential for both passenger and freight transportation. They are deemed as important vehicles for promotion of trade, tourism and logistic services in Northeast Asia. Being regional international joint ventures they substantially contribute to increasing mutual understanding between local governments and deepening economic cooperation in the region. However despite the quite a history of their operations (for instance, Oriental Sea Silk Road was launched in 1997) these routes are still not sustainable and moreover have not induced proliferation of ferry services in East/Japan sea.

GTI was involved in facilitation of this type of transport and logistics service since 2007, when Consultative Commission included NEA Ferry Route (Sokcho – Niigata - Zarubino – Hunchun) in the list of so-called “GTI projects” for joint promotion and attraction of additional funding.

From GTI side, the project activities included contacts with respective authorities (Primorsky Territory Administration, Ministry of Foreign Affairs, Ministry of Transport of the Russian Federation and its Embassy to the Republic of Korea), organization of series of expert discussions for the NEA Ferry: GTI Transport workshop (Hunchun, China, 2009); Expert Seminar on Promoting GTI Transport Projects (Busan, ROK, 2010); GTI Transport Experts Meeting (Yonago, Japan, 2010). While working together with the Dong Chun Ferry and NEA Ferry on promotion of Sokcho-Zarubino-Hunchun/Vladivostok and Sokcho-Niigata-Zarubino-Hunchun routes GTI Secretariat gathered information about infrastructural and cross-border non-physical impediments for the development of this transport service.

Presently, the operations of the NEA Ferry are suspended due to cumbersome formalities and procedures for passenger and cargo transit, differences in shareholders opinions, inadequate facilities at Kraskino, Zarubino. DBS ferry started regular shipments between Sakaiminato, Donghae and Vladivostok in 2009 and till present heavily relies on Tottori prefecture, Tottori city and Donghae subsidies.

In 2010, at the Inaugural meeting of the GTI Transport Board routes used by both NEA Ferry and DBS ferry were included in the GTI Transport Cooperation Program 2010-2012 as Promotion of Transport and Logistics Service Project. In the mean time, the Program indicated the “Integrated Transport Infrastructure and Cross-Border Facilitation Study for the Trans-GTR Transport Corridors” (GTI Transport Corridors Study) as the priority project aimed at due diligence of the infrastructure and legal environment for the cross-border freight and passenger flows in the Greater Tumen Region as well as traffic forecast for the these corridors and development of the Regional Transport Strategy. Though the GTI Transport Corridors Study comprehensively addresses bottlenecks at the transport routes in NEA, the issues related to the concrete shipping service lines in the region are not planned to be analyzed.

In view of above, to ensure that future steps toward policy coordination and NEA transport network without bottlenecks reflected in Regional Transport Strategy or other framework documents comprehensively address transport corridors and maritime routes issues it is proposed to assess the problems and impediments for ferry services in East/Japan Sea through an Evaluation Study of the Sea-Land Ferry Routes in the Northeast Asia. The Study outcomes would be complementary to the results of the GTI Transport Corridors Study.

The project was approved by GTI Transport Board at the second meeting (July 2012, ROK). ROK Ministry of Land, Transport and Maritime Affairs will sponsor implementation of the Study and plan to attract ROK research institution to the process.

The Study started in 2013. Evaluation Study of the Sea-Land Ferry Routes in the Northeast Asia should:

• elaborate on economics, structure and world experience of international ferry services,
• analyze the market for such services in East/Japan Sea, 
• summarize the findings on physical and non-physical impediments gathered via previous activities for NEA ferry promotion, up-dates of this information via interviews with stakeholders and other means,
• draw suggestions on underlying reasons of such service in East/Japan sea to lag behind the Bohai Bay or Yellow Sea and the ways of making progress in the promoting of ferry services.

Objective(s) 

The objective of the Promotion of Transport and Logistics Service Project is to facilitate the intermodal transportation services in the Greater Tumen Region through the promotion the land-sea shipping lines. The objective of the GTI Transport Corridors Study is to foster the development of a reliable, cost-effective and efficient integrated transport network in the GTR through planning and facilitating the activation and development of international transport corridors in the region.

The Evaluation Study of the Sea-Land Ferry Routes in the Northeast Asia being a complementary effort to both aims at preparing the foundation to develop the road map for the promotion of the sea-land ferry logistics services in the Northeast Asia.

Expected Output(s)

Expected project output is an analytical report:

- introducing the economics, purposes, markets and usual users of ferry routes in general;
- elaborating on market for ferry services in East Sea/Sea of Japan;
- summarizing the findings on impediments for development of the ferry services between the GTI regions (poor cross-border facilities, complicated and multiple entry/exit and transit formalities for cargos and passengers, ship renting issues, etc.);
- drawing suggestions on reasons of underdevelopment of such services;
- developing proposals on promoting ferry connections in the region.