There was a joyous occasion in April.
Hong Kong International Airport, Shanghai Pudong International Airport, Singapore Changi Airport…
Outperforming these competitors was Incheon Airport, awarded Best Cargo Airport in Asia!
What is more surprising is that it’s not the first time we’ve won this award! Incheon Airport has won this award for 6 consecutive years, demonstrating the airport’s efforts for constant growth.
What propels Incheon Airport beyond Korea to become one of the world’s logistics hub is its robust logistics infrastructure. This post will talk about the logistics infrastructure established and developed by Incheon Airport.
What makes Incheon Airport a “global logistics hub”?
Incheon Airport possesses the world’s 3rd best capability for handling international cargo, following the airports in Hong Kong and Shanghai. It is worth noting that Incheon Airport handles 2.95 million tons of international cargo and 1.16 million tons of transshipment cargo. You may not be familiar with the term “transshipment cargo.” Just think of it as transferring cargo like passengers. Easier transshipment produces a greater volume of cargo.
As of 2020, Incheon Airport has a diverse network of flights which includes 90 airlines and 188 air routes. More specifically, it offers many routes bound for the Americas and Europe and boasts a strong transshipment competitiveness.
The airport’s cargo handling capabilities are also exceptional. While the airport’s capacity can currently handle 4 million tons, it ensures cargo handling scalability with the continued expansion of logistics infrastructure, being able to handle 7 million tons in the future.
The fact that Incheon Airport boasts an easy and simple customs system and is geographically positioned in the center of Northeast Asia also greatly contribute to making it a global logistics hub.
Incheon Airport’s competitiveness lies with FTZ!
While it is important to build infrastructure, what is more important is to create real added value from such infrastructure. What makes Incheon Airport a global logistics hub is its efforts to attract various companies with different types of incentives and support, in addition to building physical infrastructure.
What is most noteworthy is that the airport has established a world-class business environment with its designation as a Free Trade Zone (FTZ). Incheon Airport FTZ is Korea’s only airport FTZ, which leads the development of airport logistics with various business models.
The FTZ is a zone in which free manufacturing, logistics, distribution, and trade activities are guaranteed. Companies benefit from in-bond benefits as well as rent that is 10-30% cheaper than that in the nearby area. Foreign companies that invest more than a certain amount of money can also enjoy rent reductions and benefits. A 50% discount for rent is provided to those investing more than USD 5 million for 3 years and those investing more than USD 10 million for 5 years.
This way a company can reduce its operating costs in order to free up money to invest somewhere else and improve its own logistics competitiveness. Incheon Airport’s ability to handle a higher cargo volume will further enhance its global standing, creating a virtuous cycle that leads to investments in other infrastructure and the attraction of more companies. Now, can you see how big of an impact the designation of a FTZ had on the airport?
Categorized at Cargo Terminal and delivered to Logis Park!
Incheon Airport FTZ is divided into the Cargo Terminal and Airport Logis Park.
Incheon Airport Cargo Terminal consists of Korean Air, Asiana Airlines, Foreign Carrier Cargo Terminal, DHL, AACT, International Mail Terminal, and US Army Military Mail Terminal. The key to operations in the Cargo Terminal is categorizing cargo quickly and accurately. Export cargo should be categorized seamlessly to be loaded onto aircrafts, while import cargo should be categorized for unloading and transport. This is why companies here use state-of-the-art logistics equipment and strengthen their transshipment functions to handle more import and export cargo per hour.
By the way, did you know that Incheon Airport accounts for 30% of Korea’s imports and exports? This is because of the characteristics of shipment goods. Goods imported and exported as air cargo are intermediate goods in emerging industries or products with high added value. They are also dubbed to be light, thin, short, and small products (LTSS). Examples include semiconductor parts, electronics, and telecom devices.
They require delicate and professional care for packaging, storage, and shipment. That is why many types of businesses, such as manufacturers, forwarding companies, and customs brokerage firms, are located in Incheon Airport Logis Park to support air cargo handling, along with the logistics companies.
Incheon Airport Logis Park is a key area that helps handle import and export cargo in the Cargo Terminal and actively contributes to creating added value in Korean companies!
What kinds of companies are based in Incheon Airport Logis Park?
Incheon Airport Logis Park has expanded in phases in response to the growing demands in the air cargo business. Since its inception during Logis Park – Phase 1 (992,000 m2) in 2006, Logis Park – Phase 2 (651,000 m2) opened in 2013. Logis Park – Phase 3 (326,000 m2) will solicit occupants at the end of this year.
The current occupancy rate of Logis Park is about 92%. You may wonder why we are expanding the park when our occupancy rate has not yet hit 100%. Expanding Logis Park requires a long time for consulting with related agencies and establishing the site. Therefore, the idea is to expand and offer space within Logis Park in a timely manner before the occupancy rate of the existing Logis Park reaches 100%. There is also the goal to create new cargo demand through the development of a specialized Logis Park.
Incheon Airport Logis Park boasts the total area of 2,240,000㎡ with Phases 1-3 combined. This does not give you a very clear idea about how big it is, right? To put it in other words, it is 313 times as big as Seoul World Cup Stadium!
What companies are based in such a vast area?
There are even more companies than those listed above. 35 companies operate their own logistical facilities in Logis Park, but if you count the companies operating within those facilities, it is home to about 300 companies. This large number itself speaks to the park’s giant size, right?
Companies in Incheon Airport FTZ are driving the growth of Korea at the center of logistics in the country. Incheon Airport will provide optimal logistics infrastructure to help companies in the park to better operate and fully support facilities and systems by preparing suitable policies!
In the next post, we will talk about how Incheon Airport prepares for the rapidly changing trends in air logistics. It will be very interesting to picture Incheon Airport’s future. Thank you for your continued interested and we look forward to seeing you next time! 😊