Ministry of SMEs and Startups Actively Supports Overcoming Logistics Challenges for SMEs This Year

Support for logistics voucher, collaboration with express logistics companies like FedEx to provide discounted rates
Collaboration with HMM to secure dedicated shipping space for SMEs on vessels bound for the US and Europe

HMM vessels are transporting logistics.
[Photo by Asia Economy DB]

[Asia Economy Reporter Kim Jonghwa] Small and medium-sized enterprise (SME) A successfully secured an $80,000 export contract with a North American distributor in Atlanta but faced difficulties due to the inability to secure a vessel. Although delivery delays and the risk of losing the importer’s trust in the long term arose, through the Ministry of SMEs and Startups’ (MSS) "SME Maritime Transport Support Project," A was introduced to an HMM vessel ready to sail immediately and was able to safely deliver red ginseng drinks and sticks to North America.

As air and sea freight rates rise and container supply difficulties persist, as well as challenges in securing vessels, the MSS will actively support SMEs again this year. On the 1st, the MSS announced that it will prioritize export logistics support so that SMEs can overcome logistics difficulties and continue exporting.

To this end, the MSS will invest 16.9 billion KRW in logistics cost support this year, including 11.9 billion KRW for logistics vouchers and 5 billion KRW for fulfillment support, and will help SMEs use express logistics at discounted prices. Additionally, it plans to collaborate with national shipping companies to support securing shipping space on major routes (650 TEU per week) and signing long-term transport contracts.

The logistics voucher program totals 11.9 billion KRW, an increase of 1 billion KRW from last year. SMEs applying for logistics vouchers can receive support covering 70% of their logistics expenses, up to a maximum of 14 million KRW per company.

Fifty billion KRW will be invested in fulfillment support for online export companies. SMEs can receive up to 25 million KRW to use for integrated processing from "product storage - customer orders - product selection and packaging - delivery."

In addition to direct logistics cost support, discounts on express shipping rates from FedEx, DHL, and UPS will be actively promoted. Through the GoBiz Korea website, SMEs can use express services offered by logistics companies at prices discounted by up to 66% compared to the regular rates.

To assist SMEs struggling to secure shipping space due to logistics difficulties, dedicated shipping space for SMEs will be arranged in collaboration with the national shipping company HMM. SMEs will be given priority booking on HMM vessels with a weekly capacity of 650 TEU, including 550 TEU for the U.S. West Coast (with 200 TEU reserved for long-term contracts), 50 TEU for the U.S. East Coast, and 50 TEU for Europe, until logistics difficulties are resolved.

Notably, from this year, the shipping space to the U.S. West Coast, which was previously provided on temporary vessels, will be converted to regular vessels, allowing SMEs to check vessel schedules in advance and establish logistics plans accordingly.

Support will also be provided for SMEs to sign long-term transport contracts with national shipping companies. Through long-term contracts, companies can use maritime logistics at fixed freight rates at the time of contract signing and receive logistics vouchers worth 14 million KRW to use for transportation costs.

Byun Tae-seop, Director of SME Policy at the MSS, said, "Companies expect the global logistics crisis to continue this year as well," adding, "We will actively work to alleviate export logistics difficulties to sustain the strong export growth of SMEs, which recorded record-high performance in 2021."

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