• 6 out of 10 Korean Logistics Managers, “Digital Transformation in Logistics Required”
    2021-05-17 hit 484

    6 out of 10 Korean Logistics Managers, “Digital Transformation in Logistics Required”


    - 95.8% of respondents said, “Expect to reduce logistics costs through digital transformation” -


     Logistics managers at Korean import and export companies agree that digital transformation in the logistics sector is necessary. However, it appears that countermeasures for digital transformation are insufficient and supports are urgently required.


     According to a report titled 'The Status of Digital Transformation and Implications' issued by the Institute for International Trade (President: Park Chun-il) of the Korea International Trade Association on May 17th based on a survey of 453 staff who are in charge of logistics at Korean import and export companies, 59.5 percent of them said, “The logistics sector also needs digital transformation.”


     In particular, 95.8 percent of respondents expressed expectations for digital transformation, anticipating that they will be able to reduce logistics costs through digital transformation. By size, 14.8 percent of respondents forecast '30% or more reduction' compared to the previous one, while 23.6 percent predicted '20-30% reduction', 36.6 percent predicted '10-20% reduction', and 20.8 percent anticipated '0-10% reduction.' Only 4.2 percent of respondents said, 'There will be no cost reduction effect.'


     However, considering the awareness of the necessity of digital transformation and expectations, preparation for digital transformation and utilization have been insufficient. Of the respondents, only 18.1 percent said that they 'understand the digital transformation', only 12 percent said that they 'are actively responding to the digital transformation', and only 8.7 percent said that they 'are using the platform service.' The respondents selected 'support for platform fees' (31.2%) and 'platform-related education' (30.4%) as the most urgent support to boost the use of digital platforms.


     The report pointed out, “Global logistics companies such as Maersk, the largest container shipping line and vessel operator in the world, and Flexport, known as Uber of the Ocean, have succeeded in digital transformation from early on by incorporating information and communication technology, whereas Korean logistics are still closed to digital transformation due to human connection-oriented environment and reluctance to online transactions,” and added, “Korea also has some companies offering digital logistics services, but the cooperation between logistics entities does not work well, which in turn increases the cost and inconvenience of shippers and the competitiveness of the logistics industry continues to decline.”


     Lee Jun-bong, head of Shippers and Logistics Service Department at the Korea International Trade Association, said, Digital transformation in logistics can be divided into the application of digital technology and the business model utilizing it. For small and medium-sized shippers, it is the most rational to use the digital logistics platform, which is the core of the business model,” and added, “The Korea International Trade Association plans to actively support the digital transformation of the logistics industry by linking the association's own logistics platform and external logistics platforms while supporting the promotion of the digital logistics platforms operated by startups and the creation of related ecosystem.”

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