Peace in Korea Could Open a Transportation Route

Peace in Korea, closer now than for decades, could open a transportation route through the peninsula that would change the way a raft of goods are shipped between China and the rest of the world.

The border between North Korea and South Korea has been cut off from trade for nearly seven decades.

But peace has rarely felt closer, after North Korean leader Kim Jong Un and South Korea’s President Moon Jae-in last week shook hands over the Military Demarcation Line that divides their countries.

While any truce is still some way from meaningful manifestation, industries around the world have started to explore the potential impacts. One area that stands out: Logistics.

Shipping cargo that would otherwise have had to access China via the congested ports of Shanghai, Shenzhen and Hong Kong would be able to stop at a Korean port before being transported across the peninsula directly into China.

The resulting impact on international maritime trade could rival the Panama and Suez Canals, says Pelham Higgins, from JLL’s Industrial team in Japan and Korea.

This would make it one of “the most important logistics corridors in the world,” says Higgins.

China is clearly a major beneficiary, he says, as a new land-based logistics corridor would serve to extend the government’s Belt and Road Initiative. Announced in 2013, the aim is to improve China’s global connectivity, open up international investment opportunities, boost exports and fuel the country’s economy.

The initiative features a US$900 billion programme of infrastructure projects, along with efforts to enhance economic cooperation along key international trade routes.