South Korea has an advanced logistics infrastructure, which the country has been developing since the 60’s. Moreover, the logistics industry is the ninth-largest in Korea with regards to revenue from sales and therefore is among the key drivers of economic growth. As of 2014, the sector employed up to 600,000 workers, and the combined revenue from sales in the sector stood at $84.4 billion (Kotra, 2016). This means that the country is high on the list of economies with effective logistical infrastructure, with ports and airports allowing travelling to a variety of destinations worldwide. It is also important to mention that the aviation and marine transport in Korea is the fifth (to sixth) largest industry in the world, with the Incheon Airport classified as the second-best airport for international freight while the Busan Port regarded as one of the best container ports in the world (Kotra, 2016).
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The government of South Korea is known to invest in transportation infrastructure to launch new projects of building expressways, railroads, and other transportation facilities for improving the nationwide infrastructure (“South Korea government’s US$108.61 bn for transport infrastructure,” 2013). The country can boast of its highways (divided into national roads, expressways, and other types of roads below the national level). In 2001, the government numbered the expressways in order for it to resemble the US system of interstate highways. The network of freeways in Korea covers the majority of the roads in the country, with tolls collected via the system of electronic toll collection operated and developed by Korea Expressway Corporation.
The railway system is considered among the most convenient ways of traveling between different destinations within the country. Since schedules for bus routes range depending on the severity of traffic, the railroad allows travelers to make exact planes since the schedules rarely change (“Trains,” 2017). Depending on the types and the number of amenities offered onboard, trains can be classified into “KTX express trains, KTX-Sancheon, Saemaeul, ITX-Saemaeul, ITX-Cheongchun, Mugungwa, and KORAIL tourist trains” (“Trains,” 2017, para. 2). It is important to mention that the Korean railway is extremely accommodative to both foreign and local travelers, providing trains to both remote destinations (e.g., Yeosu and Changwon) as well as the most popular tourist attractions with the exclusive pass that allows for the unlimited traveling for visitors.
When it comes to the water infrastructure in Korea, the government managed to develop a sustainable water sector that is developing simultaneously with the country’s economy. Despite the challenges that South Korea experienced in the past, the country can now boast of its universal wastewater and water services. Water pollution has significantly reduced, with population morbidity associated with water-borne diseases becoming non-existent (Danilenko, 2016). The government of South Korea continues its investment into the water infrastructure for maintaining the system as well as ensuring its sustainability.
Korean Air Lines Co., Ltd. is the largest airline carrier in the country, which replaced Korean National Airlines that operated until 1962. Currently, Korean Air is privately owned and serves both international and local passenger. Asiana Airlines also has a large presence in the country, serving as both commercial and cargo traffic carrier. At the moment, airlines in South Korea serve international routes while smaller airlines provide services for domestic travelers. It is important to mention that South Korea experiences extremely busy passenger air corridor (based on passengers per year). This occurred due to the affordable prices on air travel as well as the tight competition in the sector, which facilitated the trend for air travel. As of today, there are one hundred and three airports in South Korea that serve both international and domestic destinations.
South Korea operates two pipelines: the South-North Pipeline and the trans Korea Pipeline. The former is owned by the Daehan Oil Pipeline Corporation while the latter belongs to the Korean Ministry of National Defense. With regards to the import of gas to South Korea, there have been some tensions with the North Korean government. However, Russia has been planning to reduce the tension between the countries for ensuring pear in the Korean peninsula, as reported by Sputnik News (2017).
With regards to the intermodal transportation in South Korea, the country is striving to establish itself as a regional and global hub through the development of the Eurasia Initiative. Under the initiative, South Korea has a vision of creating a “new era of Eurasia with co-prosperity” through integrating digital, transportation, and Korean Wave networks (Park, 2015, p. 10). The goal of the initiative is ensuring smooth intermodal transportation through the promotion of regional investments and open economic integration of the country. The Eurasia Initiative has several priorities that include the commercialization of the North-South route, the establishment of efficient energy transportation networks, and facilitating transport connectivity (Silk Road Express) (Park, 2015).
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Logistics and Warehousing
Since the 1990’s, South Korean national logistics infrastructure has been expanding to cater to the dynamic logistics activities. As mentioned in KenResearch (2017) article, recently, the “dominance of first-party logistics and second-party logistics has been declining, whereas third-party logistics has been growing at an alarming rate in the country” (para. 2). With such large logistics destinations as Busan, South Korea is presented with opportunities many opportunities for growth and expansion within the logistics industry. The warehousing industry has increased between 2011 and 2016, with retail and industrial manufacturing leading the segment. The market is dominated by small warehouses (between 2 and 5 thousand square meters); large size warehouses (10 thousand square meters and more) constitute the second place in the rating, followed by medium size ones.
The South Korean government also invested in the development of an effective telecom structure to keep up with the active IT market. The economy was transformed with the help of the development of ICT and other high-technology equipment. Also, the partnership between companies such as Huawei and LG led to the creation of Seoul TechCity for bringing smart city capabilities for the country capital. It is essential to mention that the popularity of fixed lines has been declining.
South Korea is continuously improving the availability of convenient and innovative utilities to improve both commercial and private life. The utility construction market will be reinforced by the plan of the government to support the provision of high-speed Internet to citizens. By 2025, South Korea is expecting to establish a 5G connection to cover at least 90% of the country.
Therefore, a brief overview of the logistics infrastructure of South Korea showed that the country is highly advanced in this sphere. This means that such locations as Busan-Jinhae will be suitable for setting up a manufacturing operation and distribution hub.
Danilenko, A. (2016). Korea: A model for development of the water and sanitation sector. Web.
KenResearch. (2017). South Korea future. South Korea logistics market, warehousing automation. Web.
Kotra. (2016). Korea’s leading industries: Logistics. Web.
Park, S. (2015). Korean road to developing intermodal transport system. Web.
South Korea government’s US$108.61 bn for transport infrastructure. (2013). Web.
Sputnik News. (2017). Pipeline of peace: How Russian gas could soothe tensions in the Korean Peninsula. Web.
Trains. (2017). Web.