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Expansion and Support Plan for Urban Logistics Service Facilities in Seoul: Focusing on Parcel Service

Author: 
Gyeong-sang Yoo·Wonho Kim·Youngbeom Kim

Online distribution channels are also diversifying as the e-commerce market continues to grow due to the development of digital and mobile technologies, and online non-face-to-face consumption has soared due to the influence of the COVID-19 pandemic. According to the National Statistical Office, the size of the domestic e-commerce market a yearly 19.7% increased from 2010 to 2020, reaching 131 trillion won in 2020. In particular, as the proportion of e-commerce through mobile increased rapidly, online shopping through mobile accounted for 67.9% of all online shopping as of 2020. 

Accordingly, the size of the delivery market also increased by more than 20% compared to the previous year to 3.37 billion in 2020, and by 2021, it increased by 7.59% compared to the previous year to approximately 3.63 billion. The domestic logistics industry predicts that the size of the delivery market will expand to about 5 billion in the next five years, and social problems will emerge due to a surge in supplies in the short term. Domestic parcel service processing is based on the last-mile delivery system for each area in the city using small vehicles, and most of them are operated using the Hub & Spoke method. In this situation, it is most important to secure logistics terminals and workplace sites for classification and storage inside the Seoul metropolitan area, which accounts for more than 70% of the total delivery volume. However, logistics facilities have been pushed to the outskirts of Seoul and the metropolitan area due to safety concerns and noise caused the by the frequent entry and exit of large vehicles. This phenomenon is causing high social costs by increasing energy consumption due to excessive home/delivery distance, causing traffic congestion, deterioration of the courier’s working environment, social conflict, delays in delivery time, and the inefficient handling of cargo. In order to reduce these social costs, it is necessary to secure the appropriate number and size of logistics facilities in the Seoul metropolitan area. As a result of the analysis of this study, it was concluded that at least four additional parcel sub-terminals(Area Size about 26,000m2) are needed inside the city to efficiently handle Seoul-related shipments. This presupposes that 51 sub terminals built in Seoul and adjacent cities will be used as they are, and it is assumed that all terminals will be used jointly by courier. It was analyzed that if four additional courier sub-terminals were built inside Seoul, the total mileage of courier vehicles could be reduced by more than 50%, and the cost-benefit effect (B/C) could secure economic feasibility with 1.0 or more. Even if the economic feasibility is discussed separately, the establishment of a sub terminal inside Seoul is expected to help ease social conflicts due to the effects of easing the burden of long-distance traffic for delivery vehicle drivers and improving the treatment of terminal workers. As for additional logistics facilities, it is expected that the necessary facility sites will be secured by properly combining various types of public land such as public bus garages, public parking lots, and reservoirs in Seoul. In addition, it is necessary to actively support the establishment of a same-day delivery system (V2V) using direct transshipment between home and delivery vehicles, which has recently been attempted in the private sector.