POSCO and Hyundai Steel Join Hands for ESG Management through Logistics Cooperation

Annual Promotion of 240,000 Tons of Bulk Transport... Approximately 3,000 Tons of Carbon Reduction
Expected to Contribute to Regional Economic Revitalization through Win-Win Cooperation with Small and Medium Freight Transport Companies

[Asia Economy Reporter Hwang Yoon-joo] POSCO and Hyundai Steel are strengthening cooperation in the logistics sector to promote ESG (Environmental, Social, and Governance) management, including reducing carbon emissions and fostering win-win relationships with local small and medium-sized enterprises.

On the 29th, the two companies signed a "Business Agreement to Strengthen Cooperation in the Logistics Sector and Reduce Carbon Emissions" at the POSCO Center, attended by Kim Kwang-soo, Head of POSCO Logistics Division, and Seo Myung-jin, Vice President in charge of Purchasing and Logistics at Hyundai Steel.

At the signing ceremony, Kim Kwang-soo, Head of the Logistics Division, stated, "The combined transportation between POSCO and Hyundai Steel is the first coopetition (cooperation and competition) case in the logistics sector of the steel industry. We hope that by pooling our wisdom and setting a good precedent, a cooperative and win-win atmosphere will be created not only in the steel industry but also throughout the regional economy."

This agreement was reached with the shared intention that the steel industry should cooperate in reducing emissions even in areas not directly related to the production process to achieve the era-defining task of carbon neutrality.

According to the agreement, the two companies will share coastal shipping infrastructure such as product transport vessels and dedicated piers, and promote combined transportation of approximately 240,000 tons annually on the Gwangyang to Pyeongtaek and Dangjin port routes.

Combined transportation refers to bundling two or more transport shipments into one for joint transport, which is an efficient and eco-friendly method that minimizes empty runs or unladen voyages.

Previously, POSCO and Hyundai Steel individually transported 1.3 million tons and 1.8 million tons of coils annually on the Gwangyang-Pyeongtaek and Dangjin routes, respectively. Through this combined transportation, each company will transport 120,000 tons annually using the other’s vessels. As a result, POSCO’s coil vessels will reduce operations by about two voyages per month, and Hyundai Steel’s dedicated vessels will reduce by about one to two voyages per month. This is expected to reduce carbon emissions by approximately 3,000 tons annually, equivalent to planting 540,000 pine trees, and achieve up to a 6% reduction in logistics costs.

Moreover, shipping companies will minimize unladen voyages, which is expected to increase sales and operating profits by about 3 to 10%. Additionally, new land routes will be added between Dangjin and Pyeongtaek, where maritime transport is not possible, and between Gwangyang and Suncheon, which is expected to increase cargo volume for local freight carriers.

POSCO and Hyundai Steel successfully completed a pilot operation in August and began full-scale combined transportation this month. They plan to gradually increase the applicable volume from the initial 240,000 tons annually to a maximum of 600,000 tons.