Elimination of Lease System Abuses Including License Plate Trading... Establishment of Standard Fare Guidelines

From now on, it will be prohibited for transportation companies to demand unfair money from freight truck owners, such as fees for using license plates and costs for ownership transfer.

A cargo truck is carrying a container and moving at Uiwang IDC, Gyeonggi. / Photo by Jinhyung Kang aymsdream@

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The Ministry of Land, Infrastructure and Transport announced on the 18th that it will give prior notice of the amendment to the "Enforcement Decree and Enforcement Rules of the Freight Motor Vehicle Transport Business Act" to eradicate the abuses of the jib-in system and improve the rights and interests of freight truck owners. The prior notice period will be from the 19th of this month until the 28th of next month. Along with this, a standard freight rate guideline will also be prepared to stabilize the income of freight truck owners.

The jib-in system refers to a form where individually owned freight vehicles are registered with a transportation company and perform transportation work for a certain compensation. In this process, problems have arisen where freight truck owners have to pay the company tens of millions of won under the names of license plate fees, seal fees, jib-in fees, and so on.

In response, the Ministry of Land, Infrastructure and Transport announced the "Freight Transport Industry Normalization Plan" last February after consultations with the ruling party and government, focusing on reforming the jib-in system and introducing a standard freight rate system. However, as discussions on related bill amendments in the National Assembly were delayed, the Ministry revised subordinate laws (enforcement decrees and enforcement rules) last month.

According to the amendment, it is fundamentally prohibited for transportation companies to demand unfair money from freight truck owners. Representative regulatory targets include transportation companies demanding license plate usage fees from freight truck owners under the pretext of concluding jib-in contracts or demanding separate money on the condition of changing vehicle ownership after contract expiration. Transportation companies violating this will be subject to a fine of 5 million won or the maximum reduction of vehicles.

It is also prohibited for transportation companies to demand overloading from freight truck owners or to operate vehicles with illegal tuning such as leaf springs. Transportation companies violating this will face the maximum penalty of license cancellation.

The existing "Minimum Transport Obligation System" will be reinforced. The Minimum Transport Obligation System requires transportation companies to transport at least 20% of the annual market average transport sales volume. This ensures that transportation companies fulfill their role by providing work to freight truck owners. Transportation companies violating this obligation currently face business suspension, but in the future, they will be subject to immediate vehicle reduction of affiliated vehicles.

However, the Ministry of Land, Infrastructure and Transport plans to establish institutional safeguards such as granting temporary permits so that freight truck owners can continue their transportation business if they are not at fault when vehicle reduction occurs.

Also, the agency entrusted with handling change reports related to vehicle replacement (replacing an existing vehicle with another vehicle) will be designated by the Ministry of Land, Infrastructure and Transport. This is because 389 suspicious cases of illegal vehicle type changes and replacements were recently discovered in organizations such as the General Freight Association, which currently handles related affairs.

The standard freight rate guideline will be announced within the first half of this year. This measure considers concerns that delays in introducing the standard freight rate system lead to freight rate declines and increased income instability for freight truck owners. Accordingly, the government plans to form a Standard Freight Rate Committee by next month and establish the standard freight rate guideline through committee discussions.

Jung Woo-jin, Director of Logistics Policy at the Ministry of Land, Infrastructure and Transport, said, "Reforming the jib-in system and introducing the standard freight rate system are essential tasks to protect freight truck owners," and added, "The government plans to start with this measure and cooperate with the National Assembly to promote fundamental institutional improvements."

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