South Korea Freight Transport Report

Providing expert analysis, independent forecasts and competitive intelligence on the freight transport industry.

Report includes: BMI Industry View, Industry SWOT Analysis, Industry Forecasts, Freight Transport Risk Reward Index, Macroeconomic Forecast, Company Profiles and Regional and Country Industry Overviews.

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South Korea Freight Transport Report
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BMI View: We expect to see moderate growth across the different freight modes in Korea in 2016. Road freight will post the strongest growth across the freight modes, growing by 4.6%, as the uptick in consumer spending will benefit this mode the most. Rail freight growth will increase to 3% in 2016 as the good performance of the domestic construction sector in light of the Winter Olympics in 2018 will drive demand for iron and steel. Air freight will see its growth rate decline to 2% as import demand from China for Korea ' s consumer electronics will be weak. Over the medium term, we expect the Korean freight sector to benefit from the recently ratified FTA with Vietnam.

Over the short-term we hold a bearish view with regards to the Korean economy as the moderate recovery in the domestic economy will be insufficient to offset the stronger than expected slowdown in the external sector. As a result, we have downgraded our real GDP forecast for 2016 to 2.8% from 3.0% previously. Good growth in the construction sector will provide some support to economic growth in 2016, however, domestic consumption is expected to remain muted, largely predicated on South Korea's persistently high household debt load (approximately 90% of GDP).Weak demand for consumer articles will particularly hit air freight. We expect to see relatively weak trade dynamics in 2016 as the ongoing slowdown in the Chinese economy as well as the strength of the Korean wong relative to the Japanese yen will continue to weigh on Korean exports. Further, the high household indebtedness will partly mitigate the positive impact of the strong domestic currency on import demand. Over the medium term, we expect trade flows to pick up slightly as Korea will benefit from the recently ratified FTA with Vietnam. Further, recent signals of detente between the regional powers, China, Japan and South Korea as well as in the bilateral relationship between the two Koreas are good news for Korea's trade dynamics and, if resulting in the ratification of further FTA's, will stimulate freight over the long-term.

Efforts of South Korea's government to stimulate consumer spending will lead to an uptick in domestic consumption and stimulate road freight to grow by 4.6% in 2016, the fastest growth among the freight modes. However, Korea's high household indebtedness will remain a drag on road freight growth in 2016. Over the medium term, we expect to see good growth in road freight as the sector will benefit from growing trade flows which will be brought about by the recently approved FTA with Vietnam. .

2016 will see an uptick in rail freight growth as weak vehicle exports will be made up for by growth in the construction sector in light of the Olympics in 2018 and strong vehicles imports spurred by the strong domestic currency. Over the medium term, rail freight growth will continue to be constrained by the strained political relations of South and North Korea which does not allow South Korea to link its railway system with the rest of Asia. Nevertheless, we expect rail freight growth to pick up slightly as good growth in the construction sector will spur demand for iron and steel, which tends to be transported on rail.

High household debt levels in Korea, weak import demand from China for Korea's consumer electronics and a weaker Japanese yen will weigh on air freight growth in 2016. Over the medium term, we expect air freight growth to pick up again as the government has a number of promising FTA's in the pipeline. Further, the construction of a new airport on Jeju island will stimulate air freight with China as the new airport offers a quicker connection to the mainland.

Recent Developments

  • North and South Korea agreed on November 26 to conduct high level-talks on December 11, 2015 aimed at easing cross-border tensions and improving relations, reports AFP. The joint agreement builds on an accord signed by the two countries in August to resume high-level discussions. This is good news for South Korea's freight sector as the strained political relations make it difficult for South Korea to easily connect with the rest of Asia.

  • South Korea's rival parties have tentatively agreed to approve the South Korea-China free trade agreement (FTA) through parliament, reports Yonhap. The floor leader of the ruling Saenuri Party Won Yoo-chul said: 'The rival parties have agreed on the schedule, meaning both will tentatively seek the ratification,' (Yonhap). The South Korea-China FTA was signed on June 1 and is awaiting parliamentary approval in both countries.

  • The National Assembly of South Korea approved the FTA with Vietnam on November 30, reports Yonhap. Under the terms of the FTA, which was signed on May 5, Vietnam will remove import duties on 89.9% goods from South Korea within 15 years, while South Korea will do the same on 95.4% of Vietnamese imports.

  • The South Korean government plans to build an airport on the eastern part of Jeju Island, according to the Ministry of Land, Infrastructure and Transport. The ministry expects the airport to be completed by 2025 and to cost USD 3.5bn. The airport will reportedly allow a one-hour flight to Shanghai and a two and a half hour journey from Beijing, China.

Key BMI Forecasts

  • We forecast total road freight volumes will rise by 4.6% y-o-y over 2016 to reach 823.98mn tonnes.

  • We forecast total rail freight volumes will increase by 3.0% y-o-y over 2016 to reach 43.01mn tonnes.

  • We forecast total air freight volumes will rise by 2.0% y-o-y over 2016 to reach 3.87mn tonnes.

  • We forecast total trade value to grow by 3.2% (real growth) y-o-y.

  • The top trade partners will be China, the US, Japan, Saudi Arabia and Hong Kong.

BMI Industry View
Freight Transport
Operational Risk
Industry Forecast
Trade Forecast
Table: Trade Overview (South Korea 2012-2019)
Table: Key Trade Indicators (South Korea 2012-2019)
Table: Main Import Partners
Table: Main Export Partners
Road Freight Forecast
Table: Road Freight (South Korea 2012-2019)
Rail Freight Forecast
Table: Rail Freight (South Korea 2012-2019)
Air Freight Forecast
Table: Air Freight (South Korea 2012-2019)
Market Overview
Company Profile
CJ Korea Express
Korean Air Cargo (KAL)
Political Outlook
Long-Term Political Outlook
Table: South Korea: Political Overview
Oil Price Outlook
Global - Crude Oil, Refined Fuels And Natural Gas Prices, 10-Year Forecasts
Table: Energy Price Forecasts (Global 2013-2018)
Table: Energy Price Forecasts (Global 2019-2024)
Macroeconomic Forecast
Economic Analysis
Table: Economic Activity (South Korea 2010-2019)
Demographic Forecast
Table: Population Headline Indicators (South Korea 1990-2025)
Table: Key Population Ratios (South Korea 1990-2025)
Table: Urban/Rural Population & Life Expectancy (South Korea 1990-2025)
Table: Population By Age Group (South Korea 1990-2025)
Table: Population By Age Group % (South Korea 1990-2025)
Industry Forecast Methodology
Sector-Specific Methodology

The South Korea Freight Transport Report has been researched at source, and features latest-available data covering commercial transport and logistics by road, rail, air and water; industry forecasts, company rankings covering leading national and multinational operators; and analysis of latest industry trends, opportunities, projects and regulatory changes.

BMI Research's South Korea Freight Transport Report provides industry professionals and strategists, sector analysts, investors, trade associations and regulatory bodies with independent forecasts and competitive intelligence on the Korean freight transport and logistics industry.

Key Benefits

  • Benchmark BMI's independent freight transport industry forecasts on South Korea to test other views - a key input for successful budgetary and planning in the strategic freight transport market.
  • Target business opportunities and risks in the Korean freight transport sector through our reviews of latest industry trends, regulatory changes and major deals, projects and investments in South Korea.
  • Assess the activities, strategy and market position of your competitors, partners and clients via our Company Profiles (inc. SWOTs, KPIs, and latest activity).


BMI Industry View

Summary of BMI’s key industry forecasts, views and trend analysis covering freight transport and logistics, regulatory changes, major investments and projects and significant national and multinational company developments.

Industry SWOT Analysis

Analysis of the major strengths, weaknesses, opportunities and threats within the freight transport sector and within the broader political, economic and business environment.

BMI Industry Forecasts

Historic data series (2008-2012) and forecasts to end-2019 for all key industry and economic indicators (see list below), supported by explicit assumptions plus analysis of key downside risks to the main forecast including:

  • Transport Sector: Total freight carried by road, rail, inland waterways, maritime, air and pipeline (mn tonnes-km/mn tonnes).
  • Trade: Exports and imports (USDmn) by category of goods (manufactured goods, food, chemicals etc.); top five import and export trade partners (USDmn); imports/exports to each global region (USDmn)
  • Port Data: Throughput (‘000 tonnes) for all major ports in the state.
  • Oil Products Prices: Price forecasts for gasoline and aviation fuel (USD/bbl) at all major global energy trading hubs.
  • Economic Indicators: Nominal GDP (USDbn); real GDP growth (%); GDP per capita (USD); industrial production (%); unemployment (%)

Market Overview

Details of the freight infrastructure in each state by segment (road, rail, air, water and pipelines). Full analysis of the competitive landscape within each segment.

Industry Trends and Developments

Analysis of the latest projects across the freight transport sector (road, rail, air, sea and logistics) including a market overview which provides an outline of the key elements driving development.

Political Outlook

The Freight Transport market reports contain a chapter detailing the political outlook of a given region, examining the domestic politics, long-term outlook and foreign policy, and assessing the impact this could have on freight and transport businesses.

Company Profiles*

Examines the short- to medium-term business strategies of key industry players. Strategy is examined within the context of BMI’s industry forecasts, our macroeconomic views and our understanding of the wider competitive landscape to generate company SWOT analyses.

The latest financial and operating statistics and key company developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects.


The Freight Transport reports draw on an extensive network of primary sources, such as multilateral organisations, government departments, industry associations, chambers and company reports

*Company profiles are not available for every country. Those reports instead contain information on the current activities of prominent companies operating in the market.