This study seeks to identify the negative impacts of the increase in logistical costs on export trade, thereby examining its [NOTE: not sure here what “its” is referring to…is it study, negative impacts, logistical costs, or export trade?] countermeasures and plans to reinforce the export-competitiveness of Korean companies.
Since the 1980s, the volume of goods transported increased while the automotive industry developed, and car ownership surged, which all increased as economic growth reached the highest level of the time. On the other hand, investments in roads, ports, and railways were still at an inadequate level. Investments in logistics made an annual average increase of 19.7% from 1981 to 1989; which however, is still low compared to other industries. The percentage of logistical costs to sales of local companies increased by more than 20% in 1992, which can be seen as impeding the export-competitiveness of Korean companies as the United States and Japan held a percentage of between 13% - 14%. An increase in logistical costs brings negative impacts as shrinking company-production reduces competition, and increases wholesale and retail prices.
Two major reasons can be identified for the increase in logistical costs. First, there are not enough facilities available and there is a great gap in existing equipment facilities. Most logistics companies are small in terms of size and facilities, and only a small portion of other industries such as the electronic or automotive industries have modern facilities. In spite of such lackings, the past administration suggested an overall investment in logistics facilities including distribution facilities, as an alternative to preventing speculation on real estate.
Second, there are not enough government policies to back up the industry. As there is practically no scheme of encouraging the establishment of distribution facilities, creating a distribution facility became virtually impossible. [This next session is not clear…suggestions on possible intentions.] The policy, first introduced in 1980, also lacked specific goals. The areas specified for development were limited to becoming common freight consolidation facilities, but there was not a clear concept of what a freight consolidation facility might look like. In other words, government systems, far from reflecting reality, are impeding the establishment of a modernized distribution complex.
As Japan faced the problem of scarcity of distribution complexes in the late 1960s, Japan carried out an active government-led investment of all facilities and systems related to logistics. As a result, the country was able to nurture a world-class logistics industry with the highest level of efficiency, which in turn is making a huge positive impact on the improvement of the manufacturing and distributing industries.
Action must be carried out from various approaches in order to address this issue, which includes the following: increase in the investment of social overhead capital; examination of the establishing/expanding directions of common markets; acquisition of investment sources by increasing the special consumption tax of gasoline related to the transportation system (i.e. roads, railway, ports, etc…) and toll fees; acquisition of investment resources through private capital; alleviation of regulations on property; and development of a comprehensive policy on distribution facilities. Competitiveness will have to be reinforced in a practical way other than making quantitative increases, which includes automation of the industry, improvement of efficiency, and cost-reduction of goods distribution costs instead of a quantitative increase.
화물유통비용절감을 통한 수출경쟁력의 강화(Study on the reinforcement of export-competitiveness through cost-reduction of goods distribution costs)
|Series Title; No||정책포럼 / 제2호 (9302)|
|Subject Country||South Korea(Asia and Pacific)|
|Subject||Economy < Trade|
|Holding||KDI; KDI School|