Korea’s LG telecom unit to launch logistics platform service

LG Uplus Corp., South Korea’s No. 3 mobile carrier, is poised to launch a platform service that will digitally transform the local logistics sector as the company seeks a new growth engine amid a saturated local telecom market.

The unit of South Korea’s No. 4 conglomerate LG Group on Monday unveiled a platform for truck delivery brokerages targeting middle-mile logistics, the transport and delivery of goods from a warehouse or distribution center to fulfillment facilities, where consumers buy their products. The platform is slated be launched later this month.

The logistics process also entails first-mile delivery, or transport of manufactured goods from a supplier's warehouse to a retailer's distribution center; and last-mile delivery, the movement of finished products from a fulfillment center to consumers.

South Korea’s middle-mile delivery market was valued at 37 trillion won ($27.3 billion) per year as of 2020, according to Statistics Korea. But the sector has been ineffective as service operators tend to be small firms lacking digital processes.

LG Uplus aims to generate sales of 150 billion won within three years by providing a one-stop service for all delivery needs except actual transport to some 430,000 truckers in the country.

LG UPLUS’ OWN GOODS AND DEVICES, SYNERGY WITH AFFILIATES

“It is critical how well we can run the business,” said Kang Jong-oh, head of LG Uplus’ smart mobility business. “LG Uplus has its own goods and network devices while creating synergy with affiliates.”

The company has digitalized a truck dispatch system and set up a real-time transport control service and a performance and payments system. It also provides an industry-first navigation system for delivery trucks through the platform.

LG Uplus aims to build up a nationwide logistics network in cooperation with strategic partners.

The company has been working on the platform with logistics solutions provider Logisteq Inc., third-party logistics provider Kang Dong Logistics, and last-mile delivery startup Dver Corp.

“We aim to apply the know-how of carriers operating a nationwide business to the middle-mile delivery service,” said a LG Uplus official.

Other Korean IT companies have launched similar services.

LG Uplus’ larger rival KT Corp. released a middle-mile delivery service app in May 2022, while Tmap Mobility Co., a unit of SK Group, which has the country’s top mobile carrier SK Telecom Co., introduced such an app last February. In July, CJ Logistics Corp., the country’s leader in the sector, joined the rivalry.

Kakao Mobility Corp., the country’s largest taxi-hailing app operator, is recruiting truckers for the service.

Write to Ju-Hyun Lee at 2juhyun@hankyung.com
 
Jongwoo Cheon edited this article.