Posco to start a logistics company to the ire of shippers

Despite a strong response from the shipping industry, Posco on Tuesday announced it will establish a logistics company this year to raise the efficiency of its transportation.

Tentatively called the Global Smart Platform, the integrated logistics corporation will operate and manage the group’s transportation, including contracts. It is expected to raise the efficiency of logistics with smart and environmentally-friendly infrastructure, according to Posco.

Establishing the company is expected to help manage transportation currently separately managed by the group’s affiliates, which includes Posco International, SNNC and Posco C&C. The new operation could reduce costs. It will grow to become a logistics platform based on artificial intelligence and robot technologies, according to Posco.

The group transported 160 million tons of cargo last year, spending around 3 trillion won ($2.45 billion).

Posco said it will apply the smart factory technologies it possesses to its logistics partners. For instance, building an AI wiring system utilizing big data could minimize the time a ship sits waiting at a port for cargo to be loaded.

The shipping industry argues Posco’s entrance into logistics will interfere with the shipping ecosystem.

“Posco’s establishment of a logistics subsidiary will eventually lead it to enter the shipping business, weakening the ecosystem of the shipping industry,” said the Federation of Korea Maritime Industries. It argued Posco’s entrance into the business will provide the excuse for other major consignors to enter the shipping logistics business.

In regard to the backlash, Posco on Tuesday said steelmakers abroad, including those in Europe, Japan or China, already operate a logistics subsidiaries to improve efficiency. It further argued its logistics company will mostly deal with the management of transport materials and launching a mobile platform to improve efficiently.

BY JIN MIN-JI [jin.minji@joonang.co.kr]