1. Reasons for Amendment
The Korean cargo transportation industry can be divided into individual transport services and general transport services, and most vehicles excluding individual transport service providers are operated in an entrustment system. In an entrustment system, vehicle owners lease the right of business from the transport service provider. Many transport service providers are companies that specialize in entrustment and rely on royalty income without providing entrusted owner-operators with work. Some transport service providers persistently engage in unlawful acts such as failing to return the registration number plate usage fee to entrusted owner-operators. However, when such transport service providers are addressed by canceling their permission or reducing their fleet, law-abiding entrusted owner-operators affiliated with the said transport service providers may also be adversely affected. In this light, this Amendment grants a temporary permission for entrusted owner-operators enabling them to continue their cargo transportation business when their affiliated transport service provider is penalized by cancellation of permission or fleet reduction due to unlawful acts.
The Amendment also prescribes a more sensible calculation of safe trucking costs by the Committee on Safe Freight Rates by excluding costs that are paid by transport service providers or entrusted owner-operators to organizations or associations that they join voluntarily, as such costs are not directly associated with cargo transportation.
On another note, the replacement of retired vehicles being handled by associations of transport service providers has created vulnerabilities to unlawful acts, such as abuse of the replacement system and illegal fleet expansion by some transport service providers. Accordingly, this Amendment prescribes that the institution entrusted with the replacement of retired vehicles shall be designated and announced by the Ministry of Land, Infrastructure and Transport, thereby allowing the institution to be changed if necessary.
2. Major Provisions
A. Prescribe that payments by transport service providers or entrusted owner-operators to organizations or associations, etc. that they have joined voluntarily shall be excluded when safe trucking costs are considered by the Committee on Safe Freight Rates
(Article 4-6 (1) 4)
B. Newly insert requirements for entrusted owner-operators to obtain a temporary permission when an entrustment contract is terminated following a cancellation of permission or fleet reduction due to reasons attributable to the transport service provider
(Article 9-11 (2) newly inserted)
C. Modify provisions so that the authority over reports on changes to permissions pursuant to the proviso of Article 3 (3) of the Act shall be entrusted to an institution approved and announced by the Minister of Land, Infrastructure and Transport
(Article 15 (1) newly inserted, Article 15 (2) 1 deleted)
D. Partially delegate standards on the imposition of administrative fines to an Ordinance of the Ministry of Land, Infrastructure and Transport (Article 16)
E. Prescribe an obligation for even those companies specializing in entrustment without any actual performance to report on their performance, and newly insert standards on fleet reduction upon violation of minimum transportation obligations (attached Table 1)
F. Increase the penalty surcharge imposed when a transport service provider fails to report their performance or files a false report, and increase the maximum penalty surcharge that may be imposed upon non-compliance with obligations for transport service providers pursuant to Article 11 (24) of the Act (attached Table 2)
