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Multimodal route choice in maritime transportation: the case of Korean auto-parts exporters

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  • Su-Han Woo
  • Sun-Nam Kim
  • Dong-Wook Kwak
  • Stephen Pettit
  • Anthony Beresford

Abstract

Global offshoring has increased the need for transport of half-finished goods and components, along with finished goods. The auto-parts industry in Korea has also entered the global market as Korean car manufacturers have started to build overseas factories. Maintaining cost competitiveness by minimising total logistics costs will thus be a critical strategy for the industry. This research compares the total annual costs of four feasible transport routes from Korea to the US using the inventory-theoretic model, which encompasses direct transport costs, in-transit carrying costs, and warehouse inventory costs. We apply this model to real transport data collected from a Korean auto-parts company. A static analysis shows that inventory costs can play a decisive role in altering the cost competitiveness of different routes. In addition, sensitivity and scenario analyses with changes in variables and the market situations reveal that the cost structure of each route plays an important role in determining their relative cost competitiveness in varying market conditions.

Suggested Citation

  • Su-Han Woo & Sun-Nam Kim & Dong-Wook Kwak & Stephen Pettit & Anthony Beresford, 2018. "Multimodal route choice in maritime transportation: the case of Korean auto-parts exporters," Maritime Policy & Management, Taylor & Francis Journals, vol. 45(1), pages 19-33, January.
    • Handle: RePEc:taf:marpmg:v:45:y:2018:i:1:p:19-33
    DOI: 10.1080/03088839.2017.1344783
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    Cited by:

    1. Thi Yen Pham & Ki Young Kim & Gi-Tae YEO, 2018. "The Panama Canal Expansion and Its Impact on East–West Liner Shipping Route Selection," Sustainability, MDPI, vol. 10(12), pages 1-16, November.
    2. Wu, Zhen & Woo, Su-Han & Lai, Po-Lin & Chen, Xiaoyi, 2022. "The economic impact of inland ports on regional development: Evidence from the Yangtze River region," Transport Policy, Elsevier, vol. 127(C), pages 80-91.
    3. Junseung Kim & Kyungku Kim & Kum Fai Yuen & Keun-Sik Park, 2020. "Cost and Scenario Analysis of Intermodal Transportation Routes from Korea to the USA: After the Panama Canal Expansion," Sustainability, MDPI, vol. 12(16), pages 1-20, August.
    4. Nguyen, Phong Nha & Woo, Su-Han & Beresford, Anthony & Pettit, Stephen, 2020. "Competition, market concentration, and relative efficiency of major container ports in Southeast Asia," Journal of Transport Geography, Elsevier, vol. 83(C).

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