CJ Logistics expands global e-commerce shipping services

South Korea’s CJ Logistics Corp. is ramping up its cross-border e-commerce (CBE) businesses as its local rival Coupang Inc. is increasing dominance in the domestic market.

The logistics arm of conglomerate CJ Group has secured a global e-commerce platform client to deliver products internationally, according to industry sources on Dec. 13.

CJ Logistics will build a global distribution center (GDC) at Incheon International Airport to shorten the average shipping time within the Asia-Pacific region from the current seven days to two to three days.     

The logistics firm has increased its CBE business since December 2018 when it opened a GDC with 14,000 square meters of flooring area for iHerb, a US retail giant of nutritional supplements and personal care products. Through the distribution center in Incheon Airport, CJ Logistics is shipping iHerb items to Hong Kong, Singapore, Japan and other APAC countries.

The global CBE market size is forecast to reach $1.5 trillion by 2027 from $532.7 billion in 2020 at a compound annual growth rate of 15.5% during 2021-2027, according to an April report from UK research firm Transport Intelligence Ltd.

CJ Logistics tops the direct-to-consumer (D2C) shipping market in Korea with a 25% share, delivering products directly from overseas e-commerce websites to Korean consumers without the involvement of third-party retailers. The logistics firm is set to construct an international courier and cargo facility that speeds up local distribution and is set to build another one.

The company is providing logistics services for CBE in seven countries, Korea, the US, China, Japan, Malaysia, Singapore and the Philippines, posting 220 billion won ($169.8 million) in revenue from the business last year.

It will also expand the iHurb GDC in Incheon Airport by the first quarter of next year and install a warehouse robotics system to increase the number of delivered boxes per day to 30,000.

Market analysts say the GDC increases the airport’s competitiveness in the global distribution sector as one center, with around 16,500 square meters of flooring area, creates 300-400 jobs and brings economic value of 100 billion won.

Global shipping companies are bulking up their logistics centers in line with the rapid growth of e-commerce. In 2020, DHL Express said it will invest €750 million ($796.6 million) to expand or build facilities in Australia, Japan, Hong Kong and Korea by 2022. UPS is also building a €160 million advanced-technology logistics hub in Hannover-Langenhagen, Germany, which is its largest investment outside the US.

Write to Dong-Hui Park at donghuip@hankyung.com
Jihyun Kim edited this article.