SEOUL, Feb. 7 (Korea Bizwire) — South Korea’s major logistics firms, which enjoyed a boom during the pandemic period, are expected to report relatively sluggish results this year due to a decline in parcel traffic.
CJ Logistics Corp., the nation’s largest courier company, is estimated to have chalked up an operating profit of 417.5 billion won (US$332 million) in the fourth quarter of last year, up 21.4 percent from a year ago, according to financial data provider FnGuide.
The company’s consolidated third-quarter sales and operating profits also jumped by 9.9 percent and 22.7 percent, respectively, year on year.
The No. 2 player in the industry, Hanjin Transportation Co., revealed its tentative fourth-quarter results, saying that its consolidated fourth-quarter sales and operating profits amounted to 2.8 trillion won and 114.9 billion won, respectively, up 13.5 percent and 15.6 percent year on year.
Investment banks, however, predicted that this year’s domestic parcel delivery traffic would grow by a mere 1.9 percent year on year, down from 17 percent in 2020 and 7 percent in 2021.
Another factor that could have an impact on the financial performance of existing logistics firms is e-commerce giant Coupang Inc., which launched its own parcel delivery service.
CJ Logistics saw its third-quarter sales rise thanks to a 5 percent hike in parcel delivery costs. However, its parcel delivery volume declined by 10 million boxes compared to a year ago.
In particular, Hanjin Transportation was hit hard by Coupang’s decision to shift the delivery channel for more than half of its 7 million parcels towards its logistics subsidiary, a move that started early last year.
J. S. Shin (email@example.com)