On September 29, 2021, Hyundai Steel and POSCO signed a partnership deal at the POSCO Center in Seoul. Under the new contract, the two giant steelmakers agreed to share the coastal shipping infrastructure in and around the Gwangyang and Pyeongtaek-Dangjin ports, where the steelworks of the two companies are located.
The partnership is a steel industry first in terms of its net-zero logistics and is comprised of two types of what is known as “street turns” in the shipping industry.
For the first “street turn,” Hyundai Steel will ship hot-rolled coils manufactured at its Dangjin plant to the Suncheon Port on a standard 10,000-ton capacity ship. The cargo will be unloaded and moved to cargo storage at the Gwangyang Port. The cargo will then be reloaded onto a ship together with coils manufactured at the POSCO Gwanyang plant to be shipped to the Pyeongtaek-Dangjin Port. The POSCO coils included in the cargo will be used at KG Dongbu Steel’s Dangjin plant.
For the second “street turn,” POSCO will ship hot-rolled coils from its Gwangyang plant to its logistics center in Pyeongtaek on a “coil RO-RO (roll-on, roll-off)” vessel. The cargo will be unloaded, and the empty ship will be loaded with coils destined for Hyundai Steel’s Suncheon plant. The vessel will travel to the RO-RO cargo dock at Gwangyang Port, where the cargo will be unloaded from the ship and loaded onto a trailer to travel the rest of the way to Hyundai Steel’s Suncheon plant.
Hyundai Steel moves an annual average of 1.8 million tons of hot-rolled coils by ship (5,000 to 10,000 tons in capacity) or train along the Dangjin-Suncheon route. Meanwhile, POSCO ships an annual average of around 1.3 million tons of hot-rolled coils on coil RO-RO ships and 5,000-ton capacity ships along the Gwangyang-Pyeongtaek/Dangjin route.
In order to make this street-turn shipping of hot-rolled coils possible, the two companies will share the RO-RO cargo dock at the Gwangyang Port and POSCO’s logistics center in Pyeongtaek as well as four coil RO-RO ships and one 10,000-ton capacity ship. These arrangements will allow Hyundai Steel to ship 120,000 of its annual 800,000 tons of road and railroad cargos by coil RO-RO ship, and will allow POSCO to ship 120,000 of its annual 550,000 tons of generic vessel cargo on Hyundai Steel’s ships.
The street-turn agreement will start with 240,000 tons of cargo in the first year and then incrementally increase to a total of 600,000 tons of cargo.
The steelmakers expect to save 3% to 6% on coastal shipping in the first year. In terms of sailing frequency, Hyundai Steel will be able to cut its sailing frequency down by one or two times a month, and POSCO will be able to cut its frequency down by two times a month. These reduced sailing frequencies are equivalent to 3,000 tons in emissions reductions, which is equivalent to planting 540,000 pine saplings.
※ Street turn: The joint transportation of passengers or cargo by two or more logistics operators. Street turns minimize empty movements and save costs and time.
※ Coil Ro-Ro: A vessel specially built to carry coils. The loading and unloading of coil ro-ros takes less time than other vessels and can take place in all weather conditions.