Hanjin, Second Half Performance Improvement Accelerates... Price Increase and Operational Efficiency Enhancement

First Half Sales 1.1525 Trillion KRW 7.8%↑
Parcel Price Realization and Focus on Container Cargo

[Asia Economy Reporter Dongwoo Lee] Hanjin aims to achieve a full-scale performance improvement in the second half of this year through price increases and operational efficiency targeting corporate customers.

According to industry sources on the 11th, Hanjin's preliminary consolidated management performance for the second quarter of this year showed cumulative sales of 1.1525 trillion KRW, a 7.8% increase compared to the same period last year, while operating profit was 41.2 billion KRW, a 24.1% decrease compared to the same period last year.

Hanjin explained that the operating profit for the second quarter was 27.6 billion KRW, a 102.9% increase compared to 13.6 billion KRW in the first quarter, which was affected by temporary costs for improving the working environment of delivery workers and a delivery workers' strike in late February and early March. This indicates that performance improvement through parcel price increases and operational efficiency is gaining momentum.

Parcel Price Realignment... Investment in Improving Working Conditions such as Installation of Automatic Cargo Sorters

In particular, corporate customers' volumes and specifications are segmented based on reasonable criteria to realign parcel prices. In April, individual parcel delivery fees were raised to levels comparable to the industry, and from July, contracts are being renewed with existing and new customers reflecting cost increases as agreed upon in the social consensus body agreement.

To improve delivery workers' working conditions and reduce labor intensity such as eliminating late-night deliveries, the installation of wheel sorters (small automatic cargo sorters) at parcel terminals is being expanded.

The logistics business maintains solid performance centered on port stevedoring operations. Recently, Hanjin secured volumes from The Alliance, which includes HMM, maintaining the volume level of 2M contracts that are expiring, and with the recovery of the shipping market, a rise in global cargo volume is expected. Hanjin plans to focus on strengthening profitability mainly at the Busan New Port and Incheon New Port container terminals.

The global business can provide customized logistics services combining export-import cargo operations, transshipment, storage, distribution processing functions, and IT solutions through the Incheon Airport GDC (Global Distribution Center). It plans to actively attract air and sea transshipment cargo by linking major domestic ports such as Incheon and Busan, targeting global e-commerce companies not only for export-import logistics but also for transshipment.

2021 Target: Sales of 2.35 Trillion KRW, Operating Profit of 111.5 Billion KRW

Hanjin has set this year's management goal as "Establishing a proactive response foundation for the post-COVID-19 era through business structure innovation and strengthening internal capabilities," aiming to achieve sales of 2.3575 trillion KRW and operating profit of 111.5 billion KRW by implementing key initiatives while accelerating ESG (Environmental, Social, Governance) management.

Representative activities include eco-friendly efforts such as converting delivery vehicles to electric vehicles, operating an eco-friendly upcycling platform, and collaborating on eco-friendly lubricants for logistics vehicles, as well as CSV and social contribution activities like joint marketing for Ham-an watermelons, one-click parcel service, and the Hope Tape campaign to find long-term missing children.

The existing governance committee within the board has been expanded and reorganized into an ESG committee to enhance independence and transparency in board operations, further strengthening ESG management and enhancing long-term corporate competitiveness.

A Hanjin official stated, “From the second quarter, the effects of performance improvement are appearing. Going forward, we will continue to deliver strong results from the second half by faithfully implementing social agreements for coexistence with delivery workers, while improving cost competitiveness, operational efficiency, and financial structure.”

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