Due to the impact of COVID-19, global transportation services have faced uncertainty, especially in Mongolia is the case. As a land-locked country, Mongolia depends the service quality of the international logistics on the situation of the neighbourin...
Due to the impact of COVID-19, global transportation services have faced uncertainty, especially in Mongolia is the case. As a land-locked country, Mongolia depends the service quality of the international logistics on the situation of the neighbouring countries. The trade and transportation via third countries (i.e. China and Russia) are essential in which Mongolia mainly uses Tianjin Port in China and Vladivostok or Vostochny Ports in Russia, respectively. These limited-routes options hinder the connections to Mongolia from origins in particular during the Covid-19 pandemic period. Thus, Mongolia has undergone difficulty in receiving imported goods from foreign countries due to congestions in transit sites in China and Russia, generating more costs and longer lead-time. In this situation, the choice of a multimodal transportation route among possible options denotes a direct impact on transport costs, transportation safety and lead-time. This indicates that new transportation connections to Mongolia via China or Russia need to be identified and evaluated to see their viability. To this end, this thesis develops possible logistics routes from South Korea to Mongolia via third countries using the Time/Cost-Distance methodology, which allows the analysis and comparison of alternative multimodal transport routes. Specifically, this study aims to identify new routes for transporting automobiles from South Korea to Mongolia by comparing them with existing routes. Through consecutive discussions with automobile importers in Mongolia, the potential routes were selected and evaluated in terms of costs, distance and lead-time to provide various options for automobile logistics from South Korea to Mongolia.
At present, a route from Incheon Port through Tianjin Port to Zamiin-Uud is a common practice to transport automobiles from South Korea to Mongolia. However, this study suggests 4 possible routes taking perspectives from Mongolian freight forwarding companies. The visibility of the suggestions is evaluated using the data collected from interviews with Mongolian freight forwarders, automobile importers, South Korean freight forwarders and official webpages of South Korean logistics services.
The result shows that there is no significant difference between the routes from Incheon Port to Chinese Ports (i.e. Incheon-Tianjin-board of Mongolia, Incheon-Qinhuangdao-board of Mongolia) when both distance and costs are concerned. However, the lead-time for all options at the present of the COVID-19 period takes 2-4 months, representing highly uncertain due to political risk (i.e. Chinese Policy regarding COVID-19). This directs that consigners and consignees in both Mongolia and South Korea pay more attention to the Chinese policy that is variable depending COVID situation in China. On the other hand, transportation through the Russian port of Vladivostok is the longest distance and most expensive option but takes a similar lead-time. However, longer lead-time in this route is mainly generated by TSR booking difficulty bouncing to Central Asia regions including Mongolia because logistics service providers pay more attention to the increased cargo to Europe due to high maritime freight rates. In this situation, making long term relationships with logistics service providers may be helpful to tackle the problems.
This work also suggests diversified options of the origin ports in South Korea including Busan and Pyeongtaek, which has a great potential when only concerned costs. In particular, cargo handling charges and maritime freight are advantageous compared to those costs in Incheon origin routes.
This work cannot provide the answer regarding the question of ‘does which route have more priority for transporting automobile from South Korea to Mongolia’ based on currently available data and analysis. However, this work provides the (real information of) critical parameters of distance, cost and lead-time in terms of selected transportation routes from South Korea to Mongolia so that importers and exporters can make a comparison among the routes in terms of their priority on each parameter. This can be fruitful to find an optimal solution for practitioners and policymakers in the manner of the second-best but not the best situation.