Delivery Business Rapidly Growing

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Delivery Business Rapidly Growing

With the advance of electronic trade, delivery services are marking rapid growth. Business circles anticipate this year's domestic delivery market to increase up to 1 trillion won, twice that of the previous year.

CJ GLS, a Cheil Jedang affiliated company, took over 'Taekbae Nara' last year to enter the delivery business. Cheil Jedang plans to invest 50 billion won each year for the next five years.


Internet shopping mall companies, which had to rely on delivery companies to ship their products, have started constructing their own delivery networks. Samsung Corporations, which operates Samsung Mall, started its own delivery service at the end of last year. It has 120 delivery vehicles already. An official at Samsung Mall stated, 'We are going to establish another delivery firm toward the end of this year.'


Hansol CS Club is currently entrusting Daehan Transportation for its deliveries. However, it is planning to construct its own in-house delivery business in the long term. SK Corporations signed a franchise contract with MBE, a private mail and communication company based in the U.S. Dacom is providing Internet shopping malls and e-commerce companies with 'e-trans' services in cooperation with other delivery companies like Hanseo Deliveries and KDL.


The existing professional delivery companies, Daehan, Hyundai and Hanjin Transportation alike, are planning to expand their delivery services through strategic alliances with related companies, and also by increasing overall investment into delivery businesses. Hanjin Transportation, which started Korea's first delivery service in 1992, said it would build more logistics terminals in the North Kyungsang Province area by shelling out 30 billion won within this year. It expects to soon secure 440 delivery vehicles for its fleet. In addition, Hanjin is going to adopt a cordless telecommunication system to promptly notify customers and know the whereabouts of its cargo and vehicles.


Hyundai Transportation, renamed from Hyundai Logistics, will invest 50 billion won into its delivery business. Daehan Transportation is going to build more logistics terminals in four big cities including Taegu and Kwangju by investing 30 billion won, and also increase the number of delivery vehicles from 1,200 units to 1,720 units within this year. Daehan Transportation is equipped with wide delivery networks accessible to remote regions.


The increase in the number of delivery companies has not met the skyrocketing demand for delivery services. Because of this, some big delivery companies are subcontracting to smaller local delivery firms, which have caused various disputes over delayed deliveries, loss and damages. A source from Electro Trade Research Union pointed out, 'Eighty percent of the claims in connection with Internet shopping are about delivery problems. I think the most imminent matter is improving the quality of service rather than increasing the number of delivery companies.'


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