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More than half of the global logistics companies in Korea answered that the quality of Korea’s logistics market circumstances is above average. One out of two companies has plans to increase investment.
The Korea Chamber of Commerce & Industry (KCCI) announced its management evaluation results of 220 global logistics companies in Korea on Sunday.
Fifty percent of the corporate respondents answered that they will promote aggressive growth strategies including increased facility investment, according to the results. Companies that said they will maintain the current level of investment and employment reached 48.7 percent. The ratio of companies that replied they will reduce business and the workforce stood at only 1.3 percent.
Regarding management conditions in the Korean logistics market, more than 50 percent answered that they are above average (55.3 percent). The number of companies that answered “Mostly Satisfactory” (29.4 percent) exceeded that of those that answered “Unsatisfactory” (15.3 percent).
Areas that global logistics companies focus on in Korea are freight forwarding (42.7 percent), shipping business (40.7 percent), warehouse storage (7.3 percent) and terminal operation (4.7 percent).
More than half of the respondents named competitive advantages by developing a global network as a reason for the success in the Korean market (51.4 percent), followed by secured freight traffic with joint expansion with global shippers (21.1 percent), successful relationships with Korean partners (12.1 percent) and aggressive fund support from parent companies (9.3 percent).
The most improved conditions were logistics infrastructure including airports and ports (58.7 percent), followed by roads and basic infrastructure (38.0 percent) and market size (34.7 percent), according to respondents.
Regulations, tax system and policies (40.7 percent), administrative services at customs (32.7 percent) and prices, including rent and land prices (24.7 percent), were named as required improvements.
The companies answered more incentives, including tax exemptions and fund support, (31.0 percent), regulation enhancement and the simplification of administrative procedures (24.7 percent), digitalization and the automation of logistics services (12.2 percent) and development of inland distribution bases and logistics complexes (7.3 percent) are needed to improve the Korean logistics market and attract investment from global companies.
About 45 percent of the respondents answered that growth of the Korean logistics market is expected on a limited scale due to accelerated competition with neighboring countries. Those who answered it will maintain the current status reached 34.3 percent. The forecast for a reduced market and large market growth stood at 10.7 percent and 9.4 percent of respondents, respectively.
Kim Kyeong-jong, head of a logistics and distribution promotion team at KCCI, noted that the competitiveness of logistics infrastructure is growing steadily, however there is still room to improve in terms of regulation enhancement and the simplification of administrative services at customs. He added that the Korean government needs to actively support tax incentives and regulation improvements to attract more investment from global logistics companies in Korea.
Kim also said the Korean logistics companies need to build their global service capabilities, expanding their global network and building cooperative partnerships with foreign companies, according to the model of global logistics companies.
Source: Newsis (Oct. 6, 2013)
** This article was translated from the Korean.