Companies Lost 690 Won in Logistics Costs for Every 10,000 Won Sold

Survey on Corporate Logistics Costs by the Ministry of Trade
Food and Beverage & Retail Sectors Have Logistics Costs Over 10%

It was confirmed that our companies spent an average of 690 won on logistics costs for every 10,000 won worth of products sold.

The Korea Chamber of Commerce and Industry announced on the 6th that, based on a survey of about 1,500 manufacturing and wholesale/retail companies nationwide in the fourth quarter of last year, the logistics cost ratio to sales revenue for companies in 2022 was 6.9%.

Seoul Jung-gu Korea Chamber of Commerce and Industry. Photo by Jinhyung Kang aymsdream@

By company size, small and medium-sized enterprises with sales under 50 billion won had the highest logistics cost ratio at 7.8%. This is about twice the 4.4% ratio of companies with sales over 300 billion won. It is interpreted that smaller companies had a higher logistics cost ratio because it is relatively difficult for them to achieve economies of scale. The logistics cost ratios for companies with sales between 50 billion and 100 billion won and between 100 billion and 300 billion won were 5.9% and 5.0%, respectively.

By industry, logistics costs were highest in food and beverage (10.9%) and retail (10.6%), both exceeding 10%. Food and beverage incur high packaging costs during product distribution and often require additional cold storage and refrigeration systems. Retail requires relatively more manpower and workload for ordering, delivery, and returns, resulting in higher logistics costs.

The proportion of logistics costs for temperature-sensitive products among total logistics costs increased significantly from 7.9% in 2016, when the Korea Chamber of Commerce and Industry began the survey, to 36.3% in 2022. This appears to be influenced by the recent rapid growth in demand for cold chain logistics services that transport food from production sites to homes at low temperatures without compromising freshness.

Companies cited systematic logistics cost calculation and management (37.6%), improvement of delivery frequency and loading rate (31.4%), strengthened inventory management (30.8%), and logistics informatization, standardization, and automation (24.3%) as measures to reduce logistics costs (multiple responses allowed).

Kim Min-seok, head of the Distribution and Logistics Policy Team at the Korea Chamber of Commerce and Industry, said, "In recent years, high logistics costs have become a constant due to factors such as COVID-19, the Russia-Ukraine war, and Middle East risks including the Red Sea, which have caused increases in oil prices and maritime freight rates."

He added, "Since small and medium-sized enterprises can reduce logistics costs through joint logistics, the government should promote policies that encourage logistics collaboration, and for distribution companies, policies supporting investment in automation and smartization of distribution logistics facilities should be pursued."

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