The volume of transit cargo handled at South Korea’s largest port of Busan in July declined for the first time in 29 months, underscoring slumping global demand and commerce from worsening trade frictions between the United States and China.
According to data released by terminal operators at Busan Port, the port processed around 968,300 twenty-foot equivalent units (TEUs) of containers for transshipment in July, down 0.5 percent from the same month a year ago. Thanks to a 6.4 percent on-year gain in export and import cargo, the total volume of freight handled at nine terminals of Busan New Port and North Port increased 2.7 percent to 1.86 million over the same period.
Transshipment refers to a process of off-loading a container at an intermediate destination and loading it onto another vessel. The transit cargo traffic at Busan port has been on a sharp fall since May, contrast to double-digit growth rate per month in the second half of last year. The growth slowed to 7.1 percent in April this year, 1.9 percent in May and 0.4 percent in June.
The drop largely owed to the escalating trade tensions of the world’s two biggest economies which have been dragging down the entire international trade volume, according to industry experts. The U.S. and China take up almost 50 percent of transshipment cargo handled at Busan Port.
The nation’s import and export freight has still maintained sound growth at the port, but concerns have been raised that Japan’s restrictions on Korea-bound shipments could put additional damper on the cargo volume in the rest of the year. Although Busan Port Authority projected early this year that the import and export cargo would remain flat, it has been growing by 5 percent on average compared to a year ago period since the beginning of the year excluding February.
Industry watchers, however, predicted that it is inevitable that Busan Port would see its cargo volume decline in coming months if Korean companies cut imports of intermediary goods and Japan-bound shipments amid frictions with the neighboring country. Trade volume between Korea and Japan account for about 15 percent in total import and export cargo at Busan Port.
By Park Dong-min and Choi Mira
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