| Ahn Seung-Beom Professor, Graduate School of Northeast Asia Logistics, Incheon National University |
The world economy is in a very difficult situation right now. There is also a careful analysis that our economy is also in a situation comparable to the IMF foreign exchange crisis and the 2008 financial crisis. In an economic crisis, what is important is the recovery of the industry. Restoring vitality from national key industries such as automobiles, steel, and construction to small and medium-sized industries is a top priority. The logistics industry, which is the artery of the national economy, affects all industries, so other industries can be healthy only when the logistics industry is healthy.
On the 22nd, the cargo union’s collective refusal to transport began, which is very unfortunate news. If logistics stops, the golden time for industrial recovery will be missed. This is all the more so as we have suffered from rising logistics costs such as shipping and air transport due to the collapse of global supply chains in the US and China during the COVID-19 pandemic.
The main reason for the refusal of this transport is the safe freight rate system for trucks. The safe freight rate system is a system that guarantees freight owners a certain level of freight by adding an appropriate profit to the transportation cost for traffic safety. Currently, this system, which is temporarily applied to container and cement items, is similar in concept to the minimum wage system for cargo owners, but the cargo union insists on the permanent implementation of the safe fare system and the expansion of applicable items.
What is important is the effect of the system. If the system meets the purpose of introduction, it should be continued. However, if results are not in line with the purpose, the system loses its legitimacy. The attitudes of shippers, transport companies, and truck owners on the safe freight rate system will be very different. This is because the shipper pays more, while the borrower is guaranteed a certain level of freight.
Then, what does the freight rate system in other countries look like? There is no system that legally enforces freight rates not only in the United States and Europe, but also in socialist countries such as China and Vietnam. In some countries, such as Australia and Canada, there are cases where only a minimum shipping charge is regulated in a limited area. This means that freight rates are determined at a level where demand and supply are in balance.
What is important is the effect of the system. As the safe fare system was introduced to improve traffic safety, it will only be meaningful as a system when the effect is clear. According to the information recently announced by the Ministry of Land, Infrastructure and Transport regarding the safe fare system, there has been no clear and significant improvement in the number of deaths and accidents in traffic accidents since the implementation of the safe fare system. The effectiveness of the system in relation to the most important purpose, traffic safety, is unclear. The Ministry of Land, Infrastructure and Transport is in a position to push for a three-year extension of the safe fare system applied to containers and cement in order to further observe the effect of the system. Considering that it was difficult to clearly judge the effectiveness of the system in an unprecedented situation such as COVID-19, this is a desirable direction.
Now it’s up to the cargo regiment. Rather than expanding a system whose effect is still unclear, social discussions involving multiple stakeholders are needed. In addition, sufficient review and time are required to form a consensus on the direction of the system. Now is the time for everyone to join forces for economic recovery. For the economic recovery of our industry, above all, logistics must not stop. I look forward to a quick resolution.
* This contribution is 11month 30Worknow herald economyhas also been published.
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