150 won increase in parcel delivery cost, Lotte’s No. 1 … CJ Logistics “watching the situation”

Lotte Global Logistics has decided to increase the unit price of small parcels by 150 won for corporate customers starting on the 15th. In particular, this increase in parcel delivery costs was the first decision that came after the management agreed to bear the burden of sorting parcel services for parcel delivery drivers. The increase in the cost of parcel sorting is the same for other parcel delivery companies, so it is predicted that the price increase that started at Lotte Global Logistics will spread to the entire parcel delivery industry.

According to the parcel delivery industry on the 7th, Lotte Global Logistics distributed guidelines to all corporate customers to increase the parcel delivery price by an average of 150 won from the 15th to its national agencies. As a result, the courier fare for small-sized (width, length, and height total of 80 cm or less) will increase from 1750 won to 1900 won. One Lotte Global Logistics agency owner A said, “The rate hike (suggested by the head office) was larger,” and said, “In the process of coordinating with the agency, the price was partially adjusted.”

The labor and management of the parcel delivery industry agreed in January that the management will bear the sorting work of each local agency during the parcel delivery process. The Social Consensus Organization (Social Consensus Organization) for countermeasures against overworked parcel workers decided to exclude the sorting work from the basic scope of the courier operator’s work, and to bear the cost by employing a dedicated sorting manpower. It was aimed at reducing the work burden of the parcel delivery driver, but the parcel delivery industry argued that “an additional 45 billion to 75 billion won per company is spent annually for the input of sorting personnel, so it is inevitable to increase the freight rate due to the decrease in sales.”

This time, Lotte Global Logistics is the first to raise the parcel delivery cost because it has a relatively large cost burden due to the lack of automatic sorter (wheel sorter) facilities than its competitors. Mr. A said, “Because the head office’s revenue structure is weaker than other courier companies, we were sharing the sorting cost with the agency.” An industry insider also said, “Lotte, which has the lowest profitability among the three parcel delivery companies, would have had to raise the price first, in a situation where they had to pay enormous sorting costs and invest in automation facilities.”

In addition, the parcel delivery industry analyzes that the fact that Lotte Global Logistics decided to increase the unit price of corporate customers’ parcel delivery had an effect on the fact that the price was too low. Courier service for corporate customers accounts for about 90% of the total parcel delivery volume. However, it was not easy for a courier to raise the price of the courier as the unit price was decided through bidding. An official from a parcel delivery company said, “Currently, the parcel delivery price for companies such as some online shopping malls is formed considerably low.” “Other companies will also try to make it a reality.” According to the National Logistics Information Center, the volume of parcel delivery in the parcel delivery market is Although it more than doubled from 1.45.9 billion in 2012 to 3.37 billion last year, the average unit price during the same period decreased by 11% from 2506 won to 2221 won.

As Lotte quit’No. 1′, the parcel delivery industry also started counting on unit price hikes. CJ Logistics said, “We are conducting an internal review on the increase in unit prices,” and said, “We are watching the market situation.” Some agencies of CJ Logistics also discussed unit price hikes with large shippers last month. Hanjin Express said, “There is no plan to increase the unit price for corporate customers yet,” but said, “We have been working on realizing delivery costs for some low-cost shippers.” Meanwhile, the Ministry of Land, Infrastructure and Transport is planning to announce the results of a research service on the realization of parcel freight rates within the first quarter of this year.

Reporter Lee Byung-jun [email protected]