CJ Logistics increases delivery price by 15 percent
CJ Logistics, the country’s largest logistics firm, is raising prices by double digits in line with moves by its competitors.
The price increases, which are far higher than the inflation rate, come as the small clutch of companies that control the market ease up on their battle for market share.
The company on Thursday said the delivery fee for small packages will increase by 250 won ($0.2) to 1,850 won from the current 1,600 won.
Small packages weigh under 2 kilograms, with the sum of the length, width and depth totaling less than 80 centimeters. Packages of this size account for 70 percent of packages delivered, according to a spokesperson for CJ Logistics.
The increase in price applies to corporate clients, like shopping mall operators. Individual pricing will remain the same.
Lotte Global Logistics raised the delivery fee for small-sized packages by almost 10 percent to 1,900 won from the previous 1,750 earlier this month.
Hanjin Transportation was among the first to make the move. Since January, the company has been extending contracts with clients to deliver small-sized package at 1,800 won or above. It said 1,800 now is the basic delivery fee for a small-sized package. The company did not reveal the minimum delivery fee standard for small-sized package before making the change, saying the price varies by client.
Delivery companies have been adding workers to improve working conditions, which may be putting pressure on pricing.
“The raise was anticipated, but the ratio of the increase is higher than 100 won we expected,” Ryu Je-hyeon, an analyst at Mirae Asset Daewoo, said in reference to the CJ Logistics price increase.
“The effect of the price increase will spread fast considering the fact that the three companies, along with Lotte and Hanjin, account for 77 percent of the market share,” said Choi Go-woon, an analyst at Korea Investment & Securities.
Choi added logistics firms have paused the market share war and are now focused on increasing the delivery prices and improving working conditions.
BY JIN MIN-JI [firstname.lastname@example.org]