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Phase II

Phase II. Import / Export O/D in Korea: Survey. 2006/TPT-WG-28/IEG/011. DATA COLLECTION. Container ’ s cargo O/D data in 2001 between all of local seaports and the local areas were surveyed in 2003 & 2004: every 5 years Container ’ s cargo QUANTITIES data in 2001 from the MOMAF

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Phase II

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  1. Phase II • Import / Export O/D in Korea: Survey 2006/TPT-WG-28/IEG/011

  2. DATA COLLECTION • Container’s cargo O/D data in 2001 between all of local seaports and the local areas were surveyed in 2003 & 2004: every 5 years • Container’s cargo QUANTITIES data in 2001 from the MOMAF • Added the data of the Inchoen seaport survey in 2004 • Cargo • Many kinds of COSTS are available in the website such as • Global Enterprises, LTD @ http://www.global.co.kr/dis_index.html • Hanjin Shipping @ http://www.hanjin.com/home/main.jsp • Dongnama Shipping Co., LTD @ http://www.dnal.com/eng/office/chg/chg_korea.jsp • Etc. • Cost • MOMAF’s PORTMIS • Transit time and variance real data of various combinations of modes are few available so far • Time and risk factor 2006/TPT-WG-28/IEG/011

  3. SURVEY I – IN THE INCHEON SEAPORT IN 2004 & 2005 2006/TPT-WG-28/IEG/011

  4. Survey II. Every 5 Years Whole Nation Survey Data : 2002-3 • Cap Region. = Seoul, Incheon, Kyounggi Province • C.C. = Chungcheong • Y.N. = Youngnam • H.N. = Honam TARGET – IMPORT/EXPORT FULL-CONTAINER THROUGHPUT IN S. KOREA 2001, Thousand TEU • Import & Export • Transshipment • Costal • Total Domestic • 9,990 • Full • Empty • Import & export • 6,590 • Cap Region • Y.N.* • H.N. • C.C. • 4,770 • Full container • (32.2%) • We consider the 76% of total Capital Regional cargos, 1,170 thousands TEUs, in the pre-analysis since it is confined to five international trade areas as foreign O/Ds and three seaports as key logistic points in domestic as well as it excludes the cargo quantities by rail and costal transportation in order to increase efficiencies of analyses and easily to build the mathematical model for solving the problems. However, when we optimize the system later on, we will focus on the whole Capital Regional cargo amount regardless of the cargoes taken by truck, shipping or railway at present. * It includes 5.7 thousand TEU, that is, the cargo of Kangwon province. Source: Korea Maritime Institute (2003.2); Korea Container Terminal Authority 2006/TPT-WG-28/IEG/011

  5. GREAT INEFFICIENCY IN TRANSPORTATION SYSTEM 2001, Percent • Container throughput rates of the Cap. region by the domestic seaports • Key findings • 100% = 4,772,438 TEUs • 73% of total cargo in/out the capital region is 32.2% of total domestic cargo in/out S. Korea, flows through the Busan (mostly) and Kwangyang (a little) seaports, while the Incheon seaport, which is the nearest to the capital region, carried only 27% in/out. • Kyeong-Nam • Busan • Cheon-Buk • Cheon-Nam • Kyeong-Buk • Chung-Nam • Chung-Buk • Kang-Won • Capital Region • 73% • 1,538 TEUs • Great inefficiency • Busan • Kwang- • yang • Incheon • Other • Total Source: KMI 2006/TPT-WG-28/IEG/011

  6. 87% CONTAINER’S CARGO FLOWS OF THE CAPITAL REGION, SOUTH KOREA IN 2001 • Import • Export • 26.7%* • of total cargo** • Incheon • Seoul • Pyeongtaek • Incheon • Seaports abroad • Capital Region • Seoul, Incheon, and 31 smaller counties and towns • Gunsan • Truck • Ulsan • China • Europe • U.S.A • Japan • S.E Asia • (F.E Asia) • Rail: 10.7% • Coastal: 2.3% • Masan • Busan • Kwangyang • 69.6% • of total cargo • 3.5% • of total cargo 2006/TPT-WG-28/IEG/011 * Incheon (26.1%), Pyeongtaek (0.6%) ** Total cargos of containers between seaports and the current capital region is about 28% of the national total cargo flows in/out Source: KMI (Korea Maritime Institute) DB in 2001

  7. CONTAINER THROUGHPUT BETWEEN THE CAPITAL REGION AND THE FOREIGN O/D COUNTRIES Thousand TEU, Percent, 2001 Key findings • By Busan port • Import • Export • In case of the U.S. and Europe, most of all (about 92%) containers were carried through the Busan seaport • In Asia, some cargos (58%) moved in/out by the Busan seaport and others (42%) by the Incheon seaport. • Especially, in case of China having the largest quantities (27.2% of total), the Busan seaport (58%) were more used for transporting the container than the Incheon seaport (42%) even if the Incheon seaport’s shipping distance from China is much less than the Busan seaport. • In case of the Southeast Asia, the portion (55%) of using the Inchoen seaport is a little higher than the Busan. • U.S. • Europe • China* • Japan • S.E. Asia • Japan • China* • By Incheon port • S.E. Asia • U.S. • U.S. • Europe • Europe • China* • Japan • S.E. Asia • Import • Export 2006/TPT-WG-28/IEG/011 * It includes the cargo of a few Far East Asia (Hong Kong, Mongol, etc.) in exporting portion.

  8. THE RESULTS FROM THE ANALYSIS OF CURRENT STATUS (1/2) • Table 2.5 • Results of current status* (Billions KRW, hh:mm:ss) *These results are from analysis for about 1,170 thousand TEUs which were handled just in road. **This value of time means the cargo-weighted average transportation time (per TEU) for all traveled routes. • Table 2.6 • Details of the current time analysis between the metropolitan areas and seaports * Total time = ∑ (Unit time per route) × (quantities in TEU per route) ** Average time per TEU = Total time ÷ Quantity, for example, 6:19:28 = (7398108:15:15) ÷ (1,170). *** This value is the weighted average transportation time per TEU for portions of cargo by transportation modes. 2006/TPT-WG-28/IEG/011

  9. THE RESULTS FROM THE ANALYSIS OF CURRENT STATUS (2/2) • Millions USD • 531 • 793 • 1,142 • 1,430 • Table 2.7 • Estimating inland transportation cost* 2006/TPT-WG-28/IEG/011 • 2001 • 2004 • 2008 • 2011 * The Estimations of future quantities are obtained by the interpolation method, and furthermore we find the future costs under assumption that the future ratios of container cargo traffic by transportation mode will be equal to those of year 200l.

  10. Phase II • Build Model • Model I: Minimize Total Logistics Cost • Model II: Find Where SSS can be more competitive 2006/TPT-WG-28/IEG/011

  11. Phase II Model I: Minimize Total Logistics Cost 2006/TPT-WG-28/IEG/011

  12. RESEARCH MOTIVATION • So, we have ... • Begun to explore more diverse transportation network for the capital region’s cargoes among • Coastal shipping, • Railway system through ICD, • Truck and also air transportation • Our Vision ... • Korean government’s strategy • To build a logistic hub of the Northeast Asia in Korea and • To make a great deal of efforts • However, our questions are ... • How to develop the logistics/transportation system or infrastructure? • How to reduce the current logistics cost? • How much can we reduce costs? • Which is better choices among trans. modes and nodes as a key points? • Uni- or Inter-modal? • “Korea situation” • ? • High logistics cost • Inefficient transportation system . . . • Road and damage to major highways between Seoul and Pusan • Environmental degradation, • Inefficient infrastructure investment and • Notably trucker drivers’ illegal and intentional strike 2006/TPT-WG-28/IEG/011

  13. RESEARCH PROPOSE 1 • Current analysis • We, first, analyze the current cargo flows and logistics costs analysis focused between the metropolitan area and seaports (including the import and export) 3 4 • Suggesting the best node and route • Finding the Gap • Third, we analyze the effect of cost-reduction through the comparison bet. current status and two (uni- or inter-modal) optimal cases • Fourth, this study quantitatively suggests which seaports should be developed from the perspective of minimizing the logistics costs, time, and risk factor 2 • Finding Optimal cases • Second, the study finds not only optimal seaport’s location as one of key nodes, with minimum logistics costs, but also optimal routes 2006/TPT-WG-28/IEG/011

  14. w1, w2, w3 : Weight • d+1, d+2, d+3 : (Positive) Deviation variable • Q: Quantities of cargo • C: Cost • T: Time • R: Risk factor (as time variance) BASIC MATHEMATICAL MODEL : 0-1 INTEGER GP FORMULATION • Fitness Function (Objective function) • Minimize(w1∙d+1 + w2∙d+2 + w3∙d+3 ) • Three Aim Constraints – Conflicting objectives (trade-off) – d+1 = 0 1 + • COST – d+2 = 0 2 • TIME – d+3 = 0 3 • RISK FACTOR (or TIME-VARIANCE) • Other System Constraints , for every route (i, j, k) or (k, j, i) xj, ymjk, ymkj = 0 or 1 , for every route (j, k) , for every (k, j) 2006/TPT-WG-28/IEG/011

  15. Start Describe the problem Generate initial solution Test: Is solution best [good enough]? YES Stop NO Select best parents [performers] to reproduce Apply crossover process and create offspringApply random mutation GENETIC ALGORITHMS AS A SOLVING METHOD • GAs’ Process • Basis and Key characteristics • Darwin’s basic principles –“Survival of the fittest“ • An iterative, heuristic searching algorithms • Developed by John Holland in 1970s • Global Search ability (Multi-points search, not single point) • Fitness function do not need linearity • Deal with qualitative variables • Genetic operators • Reproduction • Through reproduction, the GAs produces new generations of improved solutions by selecting parents with higher fitness ratings Crossover • Forms new offspring between two randomly selected ‘good parents’ • Operates by choosing a random position in the gene string of the parents and exchanging the segments Mutation • Operates randomly and infrequently by changing the gene string of the chromosomes • To prevent found solutions from falling into local solution area 2006/TPT-WG-28/IEG/011

  16. Phase II • Model II: • Find Where SSS can be • more competitive 2006/TPT-WG-28/IEG/011

  17. Geographic and economic conditions for developing SSS • The goal is to attain the cheapest, fastest and most reliable transport conditions • The effort for intermodality is increasing benefits and decreasing transshipment costs • New handling techniques reduced costs, times and risks of transshipment 2006/TPT-WG-28/IEG/011

  18. Condition for SSS and critical threshold • Different modes have a different competitiveness for different distance • Terminal cost: road<rail<sea • Line haul cost: road>rail>sea • Such framework point out the condition for SSS competitiveness 2006/TPT-WG-28/IEG/011

  19. b` Total Cost a` a` Total Cost b` a a b b O O A A B B D D Illustrate the total cost of structure 2006/TPT-WG-28/IEG/011

  20. Mathematical definition for geographical condition • (1) Only by road : • (2) By SSS: • Condition (1)>(2) • Where y is road distance between A and B, x is sea transfer distance between A and B 2006/TPT-WG-28/IEG/011

  21. Future Plan • Future Collect Data : • - Customs Agency Data to analyze shipmentwise • details (Sep. – Oct. 2006) • 2. Build Model (Oct. – Nov. 2006) • 3. Test Model (Nov. - Dec. 2006) 2006/TPT-WG-28/IEG/011

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