By Kim Hyun-cheol
Staff Reporter
Korean parcel delivery firms dealt with more than 1 billion packages in total last year, nearly triple the figure from the previous year, according to a recent report from a state-run institute.
This means each person in the country used the delivery services 21 times on average in 2009, the Korea Transport Institute (KOTI) said last week. The overall amount of delivered parcels jumped from 400 million in 2008, raising the market value to some 2.9 trillion won ($2.6 billion).
The rapid growth of the online commerce and home shopping industries has directly led to the expansion of delivery services, the report said. The market has grown over 10 percent each year since 2001, and is expected to be valued at 4 trillion won in 2014.
In the same period, the number of delivery service providers grew from nine to 19, and that of overall employees rose from 20,000 to 35,000. Currently, they account for 12 percent of the South Korean transport business.
As competition heats up among companies, working conditions of those involved in the industry are deteriorating, KOTI said.
While work intensity deepens, delivery costs fell and turnover rates are also on the rise, causing a labor shortage.
About 52 percent of delivery drivers change jobs for different industries after five years, according to the report.
A worker in the business deals with about 180 parcels a day, 30 to 40 more than regarded as appropriate. Delivery costs per box fell from 3,692 won in 2002 to 2,497 won last year, compared to the 7,600 won in Japan.
Complaints from customers are mounting accordingly. The delivery defect density jumped 39 percentage points to 169 percent in major companies between 2007 and 2009.
The Ministry of Land, Transport and Maritime Affairs plans to set up a series of measures to improve the industry aimed at enhancing overall service levels and protecting consumers.
It also expects to lift the restriction on the increase of delivery vehicles at companies, in consideration of the increased volume of parcels.
The government has not been allowed an increase in numbers since 2004 for fear of excessive competition.
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