The melting ice in the Arctic is reshaping the global shipping landscape. The government has identified the Arctic route as a new national growth axis, accelerating pilot operations, special legislation, and the development of hub ports. Following an examination of the readiness and strategies of Busan, Ulsan, and Pohang's Yeongilman ports, this article explores the competitive advantages Ulsan Port must secure in the Arctic route era. <Editor’s Note>
Ulsan Port's most realistic competitive advantage in the Arctic route era is already established.
With decades of experience handling liquid cargo, storage facilities, pipeline networks, and a robust refining and petrochemical industry, Ulsan is also represented by HD Hyundai Heavy Industries in the shipbuilding sector.
Additionally, Ulsan is gaining experience in supplying next-generation ship fuels such as LNG, methanol, and ammonia. This division of roles, with Busan focusing on containers and Ulsan on energy, is the backdrop for the government's strategy.
The challenge now is the next step.
Will Ulsan Port remain a hub that only supplies fuel to ships passing through the Arctic route, or will it evolve into a port where cargo, ships, energy, and related industries operate together?
Ulsan Port has a clear track record in the eco-friendly ship fuel sector.
The port has accumulated experience in supplying methanol as a ship fuel, and in September of last year, it became the first in South Korea to supply 830 tons of green methanol to a dual-fuel dry bulk carrier.
In February of this year, Ulsan successfully conducted commercial bunkering by supplying LNG during the unloading of a car carrier, and in April, it supplied 600 tons of clean ammonia to an ammonia-powered gas carrier.
By supplying LNG, methanol, and ammonia to actual vessels, Ulsan is broadening its experience as a next-generation ship fuel supply port.
As the decarbonization of international shipping accelerates, this alternative fuel supply capability is expected to be a key factor in determining port competitiveness.
Byun Jae-young, CEO of Ulsan Port Authority, stated during the ammonia supply, "This was achieved based on Ulsan Port's energy infrastructure and accumulated bunkering experience and capabilities. We will further strengthen our ability to supply eco-friendly ship fuels."
However, relying solely on eco-friendly bunkering will not guarantee Ulsan Port's future in the Arctic route era.
While Ulsan can temporarily supplement Busan's inadequate bunkering capabilities, Busan is also working to establish its own eco-friendly bunkering infrastructure by 2030.
Once Busan's fuel supply capabilities are in place, it will be challenging for Ulsan to maintain differentiation through bunkering alone.
Thus, Ulsan Port needs to move beyond 'fuel supply' to the next stage.
The first step is cargo.
A noteworthy aspect of the agreement signed on the 20th between Ulsan Port Authority, Dutch shipping company Royal Wagenborg, and the Korea Maritime Promotion Corporation is not just bunkering.
The three entities agreed to jointly explore potential cargo between Korea and North America and assess the feasibility of Arctic route operations. They will also collaborate on developing operational manuals and securing ice-class vessels.
This year, up to four vessels passing through the Arctic route are expected to call at Ulsan Port to receive fuel or unload cargo.
In this regard, Byun Jae-young stated, "This will serve as a practical foundation for implementing the government's Arctic route policy, enhancing the domestic shipping industry's capabilities for Arctic operations and strengthening port competitiveness."
If vessels passing through the Arctic begin to load and unload actual cargo at Ulsan Port, it will mark the first test of integrating into the Arctic route logistics network beyond simple bunkering.
The success of the Arctic route ultimately depends on cargo.
Ulsan is home to a concentration of refining, petrochemicals, non-ferrous metals, automotive, and shipbuilding industries.
If a bidirectional logistics structure is established, bringing in energy and raw materials from the Arctic and exporting products manufactured in Ulsan's industrial complex, Ulsan Port can position itself as a key part of the supply chain rather than just a stopover.
The Northwest Passage is also noteworthy. Using the Northwest Passage from Ulsan to Quebec, Canada, the sailing distance is approximately 13,500 kilometers, about 35% shorter than via the Panama Canal.
However, uncertainties remain regarding Russian sanctions, year-round navigability, freight and insurance costs, icebreaking expenses, and actual shipper demand.
Ultimately, identifying which cargo will come from which countries and which companies in Ulsan's industrial complex will be the actual demanders is a necessary preliminary step.
Port competitiveness is not built solely on the scale of facilities. Securing shippers and shipping companies that will actually move cargo is essential for the route to translate into industry.
Another avenue for expansion for Ulsan Port is shipbuilding and maintenance, repair, and overhaul (MRO).
Vessels operating on the Arctic route require higher levels of technology for hulls, propulsion systems, communication, and navigation equipment than standard commercial vessels.
Ulsan has established a world-class shipbuilding ecosystem centered around HD Hyundai Heavy Industries.
If Arctic route vessels can not only load and unload cargo and receive fuel in Ulsan but also receive maintenance and equipment supplies, the added value generated from a single port call could significantly change.
Ulsan Port Authority has also included the activation of the next-generation ship fuel supply market and support for Arctic route development based on MRO technology as actionable items in its '2040 Vision.'
While Busan's greatest asset lies in its container and transshipment network, Ulsan possesses energy, manufacturing, and shipbuilding industries.
Rather than competing for the same functions as 'Arctic route hub ports,' it is more realistic to differentiate roles based on each port's industrial foundation.
In January of this year, Ulsan City launched the 'Task Force for Leading the Arctic Route Era Based on Ulsan Port.'
Participating entities include Ulsan Port Authority, Ulsan Regional Maritime Affairs and Fisheries Office, research institutions, and the port and logistics industry, all working to develop response strategies connecting the Arctic route with shipping, energy, and logistics.
The key now is to translate these plans into actual business ventures.
Industry stakeholders emphasize that attracting vessels passing through the Arctic route, supplying eco-friendly ship fuels, discovering Arctic cargo, and linking MRO and shipbuilding equipment industries must lead to concrete projects.
With the special law for the Arctic route set to take effect in December, competition among port cities for government support and hub functions is expected to intensify.
Ulsan already has energy storage and supply networks, refining and petrochemical industries, and a world-class shipbuilding sector that are difficult for other ports to replicate in the short term.
Creating a structure where vessels traveling to and from the Arctic can refuel, load and unload cargo, and receive maintenance and equipment services in Ulsan is central to the Arctic route strategy envisioned by Ulsan Port.
The opportunities presented by the Arctic route are not solely on the water; the answer lies in how Ulsan connects its existing industries.
* This article has been translated by AI.
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