Hanjin "Strengthening CSV and New Businesses in 2021... Continuing Investment in Business Structure Innovation"

Hanjin, Incheon Airport Integrated Logistics Center 'GDC' Overview

[Asia Economy Reporter Dongwoo Lee] Hanjin announced on the 21st that its management goal for 2021 is to "establish a proactive response foundation for the post-COVID-19 era through business structure innovation and strengthening internal capabilities."

The key initiatives to achieve this include enhancing e-commerce-related capabilities, shared value creation (CSV) activities, and new businesses. Additionally, they plan to continue investing in infrastructure and automation, upgrade IT systems to build a smart business environment, and improve corporate culture.

According to the preliminary results of Hanjin's 2020 management performance, consolidated operating profit reached 111 billion KRW, a 22.4% increase compared to 90.7 billion KRW in the same period last year, and sales also increased by 7.5% to 2.216 trillion KRW. Building on this growth momentum, the business plan aims to achieve sales of 2.3575 trillion KRW and operating profit of 111.5 billion KRW, similar to last year.

This operating profit reflects investments in improving courier workers' working conditions, such as installing automation equipment at major large sub-terminals nationwide to implement the courier driver overwork prevention measures announced last October.

To proactively respond to the post-COVID-19 era and strengthen capabilities related to the rapidly growing e-commerce sector, Hanjin plans to continuously expand capacity (Capa) to achieve a 20% market share in the courier market by 2023, increasing daily capacity to 1.91 million boxes this year. In line with the growth of the cold chain market, they will also expand fresh logistics services based on the currently operated Seoul complex logistics frozen/refrigerated warehouse.

To target the global e-commerce market, Hanjin will focus on attracting volumes from global e-commerce companies through the Incheon Airport complex logistics center GDC and Hanjinex, and strengthen key customer management at domestic port operating corporations such as Hanjin Busan Container Terminal (HJNC), Hanjin Incheon Container Terminal (HJIT), and Pyeongtaek Container Terminal (PCTC) to maintain global alliance volumes.

In particular, they will further strengthen CSV activities such as one-click courier service, Naejiwajipsog Fruit gift cards, and eco-friendly wing box group purchases, while also activating platform businesses that will enhance Hanjin's competitiveness.

Alongside this, Hanjin will actively discover new businesses through the 'Hanjin Open Innovation' strategy introduced to find synergies with the courier and logistics business sectors and expand existing businesses by collaborating with related institutions and startups.

Hanjin Taekbae

To strengthen business competitiveness and upgrade IT systems, Hanjin plans to invest 213.5 billion KRW this year.

They will continue executing plans to build the Daejeon and East Seoul hub terminals into mega hub terminals and construct a new courier hub terminal in Wonju, expanding courier/logistics bases and automation equipment such as automatic scanners and wheel sorters.

Additionally, they will strengthen port comprehensive logistics service capabilities by jointly constructing a logistics center with shipping companies on the hinterland of Incheon New Port and expand terminal infrastructure by increasing handling equipment at container terminals located in Incheon, Busan, and Pyeongtaek to enhance port operation competitiveness.

Along with this, they will improve the transportation management system (TMS) and courier systems and establish a smart business environment by introducing RPA (Robotic Process Automation), thereby enhancing customer service and work efficiency.

Internally, to proactively respond to the rapidly changing global logistics environment, they will strengthen job expertise training for all employees to improve workforce operation efficiency and actively participate in ESG management, including industrial safety, fair trade compliance, and eco-friendly policy responses.

Following the sale of non-core businesses such as the rental car business and real estate in Busan Beomil-dong and Seoul Doksan-dong last year, Hanjin plans to strengthen financial soundness and secure investment resources this year by selling underutilized real estate and securitizable stocks.

Hanjin stated, "We will continue to secure future competitiveness in core businesses and are determined to achieve the 2021 management goals as well as 'Vision 2023: sales of 3 trillion KRW and operating profit of 120 billion KRW (4%)'."