| Professor Ahn Seung-Beom, Northeast Asia Graduate School of Logistics, Incheon National University |
The world economy is in a very difficult situation at the moment. There is also a careful analysis that our economy is also in a situation similar to the IMF foreign exchange crisis and the financial crisis of 2008. In an economic crisis, what is important is the recovery of the industry. Restoring vitality from key national industries such as automobiles, steel, and construction to small and medium industries is a top priority. The logistics industry, which is the artery of the national economy, affects all industries, so only when the logistics industry is healthy can other industries be healthy.
On the 22nd, the cargo union began to refuse collective transport, which is very unfortunate news. If logistics stops, the golden time for industrial recovery will be lost. This is even more so as we have suffered from increased 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 rejecting this transport is the safe freight rate system for trucks. The safe freight rate system is a system that guarantees a certain level of freight to freight owners by adding an appropriate profit to the freight cost for traffic safety. Currently, this system, which is being applied temporarily to container and cement items, is similar in concept to the minimum wage system for cargo owners, but the cargo union is demanding implementation perpetuation of the safe price system and expansion of eligible items.
What matters is the effectiveness of the system. If the system meets the purpose of introduction, it should be continued. However, if the results do not match the purpose, the system loses its legitimacy. The attitudes of shippers, transport companies, and truck owners to the safe freight rate system will be very different. This is because the carrier pays more, while the borrower is guaranteed a certain level of goods.
Then, what does the freight rate system look like in other countries? 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 set at a level where demand and supply are in balance.
What matters is the effectiveness 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 published 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 its 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 to the secure price system applied to containers and cement in order to further observe the impact of the system. Given that it is difficult to clearly judge the effectiveness of the system in an unprecedented situation like COVID-19, this is a welcome direction.
Now it’s up to the cargo regiment. Rather than expanding a system whose effectiveness is still unclear, we need social discussions that include multiple stakeholders. In addition, sufficient review and time is needed to form a consensus on the direction of the system. Now is the time for everyone to join together for economic recovery. For the economic recovery of our industry, above all, logistics should not stop. I look forward to a quick decision.
* This contribution is 11month 30Worknow announcing subtletiesalso published.
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