Samsung, Hyundai Motor, CJ to Actively Open Logistics Work... Government to Provide Strong Incentives to Excellent Companies

Fair Trade Commission and Ministry of Land, Infrastructure and Transport Sign 'Voluntary Compliance Standards for Opening Logistics Work' Agreement with Five Business Groups including Samsung, Hyundai Motor, and CJ

Jongwook Cho, Chairman of the Korea Fair Trade Commission. (File photo)

[Asia Economy Reporter Joo Sang-don] Five major business groups?Samsung, Hyundai Motor, LG, Lotte, and CJ?have committed to actively opening up logistics work opportunities. These companies agreed to select trading partners through objective and rational procedures when placing logistics orders and to actively utilize the standard logistics service contract.

On the afternoon of the 8th, the Fair Trade Commission (FTC) and the Ministry of Land, Infrastructure and Transport (MOLIT) held a 'Win-Win Agreement Ceremony for Improving the Logistics Market Transaction Environment' at the Korea Chamber of Commerce and Industry, representing shipper companies and logistics companies along with the five major business groups.

As of 2018, the proportion of internal transactions within logistics companies affiliated with large business groups stood at 37.7%, significantly higher than the overall average of 12%. The government views the practice of securing internal transaction volumes mostly through sole-source contracts as a factor that restricts efforts to strengthen competitiveness across the logistics industry and hinders the growth of independent and specialized logistics companies. Additionally, unreasonable contract practices arising from differences in status and bargaining power between shipper companies and logistics companies have been identified as problematic.

Accordingly, the FTC and MOLIT judged that voluntary efforts by the industry are crucial to creating a sound transaction environment within the logistics market and promoted the establishment of voluntary norms to spread a culture of coexistence and fair trade.

The 'Voluntary Compliance Standards for Opening Logistics Work' prepared by the FTC is a kind of guideline that presents specific procedures allowing large business groups to select trading partners through reasonable consideration and comparison when placing logistics orders. The basic principles include ▲ensuring procedural fairness ▲expanding third-party logistics ▲enhancing transaction efficiency and expertise ▲coexistence through fair trade ▲securing objectivity and transparency in the transaction process.

MOLIT has prepared a 'Standard Logistics Service Contract' that stipulates basic principles for transactions and the rights and responsibilities of contracting parties between shippers and logistics companies, aiming to improve unreasonable practices and prevent unfair trade.

At the agreement ceremony, the FTC and MOLIT first signed a memorandum of understanding (MOU) to expand cooperation in various areas, including ▲sharing logistics market information ▲consulting on system establishment and improvement ▲advising on relevant laws ▲joint investigations and research. Following this, a win-win agreement was signed involving FTC Chairman Cho Sung-wook, MOLIT Minister Noh Hyung-wook, representatives of shipper and logistics companies from the five major business groups (10 companies), the Korea Chamber of Commerce and Industry, and the Korea Integrated Logistics Association. The attendees pledged to participate in the dissemination and expansion of the voluntary compliance standards for opening logistics work and the standard logistics service contract and adopted a declaration of practice.

At the event, Chairman Cho emphasized, "For the unique dynamism and vitality of the logistics industry to fully demonstrate their value, an environment where 'competition-friendly and fair transactions' occur is necessary," and urged, "Businesses participating in the logistics market should incorporate the intent and content of these voluntary compliance standards into their corporate management."

Going forward, MOLIT and the FTC will form a working-level consultative body to regularly monitor progress for continuous policy coordination. Additionally, companies that actively open up work opportunities and adopt the standard contract will receive incentives such as additional points in the fair trade agreement implementation evaluation (FTC) and excellent logistics company certification evaluation (MOLIT), actively establishing incentives to promote the spread of voluntary norms.

This content was produced with the assistance of AI translation services.