Incheon City to Support 'Half-Price Delivery for Small Businesses' from October... Collection Centers at 57 Subway Stations

by Park Haesook

Published 18 Apr.2024 16:52(KST)

Incheon City will support courier services at half the market price for local small business owners starting this October. On the 18th, the city signed a 'Half-Price Courier Support Project Agreement' with the Incheon Small Business Association and Incheon Transit Corporation.

In the first phase, from October this year to June next year, courier collection centers will operate at 30 out of the 57 stations on Incheon Subway Lines 1 and 2. In the second phase, starting July next year, collection centers will be operated at all stations. Parcels entrusted by small business owners at subway station collection centers will be delivered to existing courier company collection points via subway and electric cargo vehicles, and then shipped to their final destinations.

The half-price courier service will support up to 120 shipments per year per small business owner in Incheon. The city plans to increase the support volume to 800,000 shipments next year, 1.3 million in 2026, and 1.6 million in 2027. The city expects that the eco-friendly collection system using subways and electric cargo vehicles will reduce carbon emissions by more than 25% compared to the current level, contributing to climate crisis response.

Kim Eulsu, Director of the Maritime and Aviation Bureau of Incheon City, said, "We expect that the half-price courier service utilizing the subway will reduce the economic burden on small business owners and contribute to carbon reduction. We will closely cooperate with related organizations and groups to successfully promote the project."

Incheon Subway Station Half-Price Parcel Collection Center [Provided by Incheon City]

Following the COVID-19 pandemic, the online shopping market rapidly grew to a scale of 227 trillion won last year due to the spread of non-face-to-face consumption patterns. However, small business owners with low sales volumes face increasing difficulties in securing competitiveness due to the expansion of large corporations into online and offline markets and the aggressive presence of overseas direct purchase platforms.

In particular, 72% of small business owners in Incheon send about 10 parcels per month on average. Due to the small volume, it is difficult to contract with existing courier companies, and even when contracts are made, they must bear high unit costs. Additionally, major courier companies do not offer same-day delivery products for small business owners, making it difficult for consumers to use popular same-day delivery services.

To address these issues, Incheon City has been conducting a 'Small Business Joint Logistics Center Operation Pilot Project' from July last year to January this year, collecting scattered small-volume parcels from small business owners, contracting collectively with existing courier companies to lower courier costs, and providing pickup and same-day delivery services even for a single parcel.

As a result, courier prices became about 25% cheaper than the average market delivery price, and delivery times were reduced by more than 50%. Additionally, 23% of the 560 participating companies newly entered the online shopping market, and due to reduced courier costs and expanded online sales, the annual sales per company increased by 10.7%.