TOC raises 11.2% in pier leasing

Coming this May, pier lease costs by the nationwide Terminal Operating Company (TOC) will be increased by 11.2 percent on average, from 0 percent at the low end to 23.5% at the high end.

The Ministry of Maritime Affairs and Fisheries revealed April 14 that it will revise the lease system for 47 TOC branches in nine ports in Korea into a differentiated profitability oriented system for each pier.

According to MOMAF, this revision is the result of a project from the Korea Maritime Institute (KMI) in the wake of the necessity for a rational lease system that considers individual port peculiarities.

A spokesman from MOMAF said, "it adopted small increases to ease the economic difficulty and shock of the TOC industry, even if the KMI suggested high differentiated increases (a 51.5% rise in general) in the lease system for each port nationwide."

Pusan received the highest increase, 17.4%, among domestic ports and Inchon followed with 13.8%. Ulsan ranked third place with 13.2% and Pohang fourth with 7.8%.

Divided by harbor, Choongang harbor in Pusan was raised by 23.5% and the Ulsan Container harbor in Ulsan was next in line with 22.7%. The third harbor took third place with a 21.7% increase, while fourth harbor in Pusan and the sixth and seventh harbors in Ulsan followed with a fourth place tie at 21.2%. Overall, increases in domestic harbor pier lease rates marked an 11.2% hike.

An official at MOMAF said that the lease period of this contract will be three years and the lease should be the same every year except in special cases.

In addition, MOMAF expects that this revised lease system will help to improve productivity in port operations such as massive reductions in stevedoring rates.