Joint Delivery via Garak Market Logistics System

Starting September 1, 2024, joint delivery for new Vegetable 2-dong to be implemented... - March operator contract, April-July participant recruitment, staff and equipment introduction, system setup, August pilot operation before full launch... Expected to ease severe congestion, labor costs, and safety accidents from individual logistics

Garak Mall

The Seoul Metropolitan Agricultural and Marine Products Corporation (President Moon Young-pyo) announced that starting from September 1, 2024, it will implement joint delivery within the market for distributors moving into the newly constructed Vegetable Building 2 at Garak Market, completed with modernized facilities.

Joint delivery refers to internal market logistics that proceed from the auction site to the store (transfer), and from the store to customers waiting to purchase within the market (delivery). It excludes the current normal operations of unloading and delivery handled by the dockworkers' union and others.

After related research services, logistics company briefings, and recruitment announcements for operating companies over the past year, a preferred negotiator was selected through expert proposal evaluations in February this year, and a contract was signed with a logistics specialist company in March.

The selected consortium consists of Korea Logispool, SK, and Ditas. From April to July, they will recruit participating distributors, introduce operational personnel and equipment, and establish a logistics system. After a pilot operation in August, the full project is scheduled to commence on September 1.

Currently, about 4,100 individual logistics equipment units (forklifts, electric carts, etc.) operate in Garak Market, occupying a storage area of 10,000㎡. The congestion caused by individual logistics of distributors is increasing annually due to the limited market space. Consequently, the high risk of accidents and the resulting management costs are worsening the business conditions for distributors.

Especially with the enforcement and strengthening of the Serious Accident Punishment Act in January 2024, this burden has increased further.

During the 2023 research service, the corporation surveyed the willingness of wholesalers among the demand side of fruit and vegetable categories to use joint delivery logistics services. 62.6% agreed to transfer services, and 75% agreed to delivery services. Based on the research results, the corporation plans to systematically provide services including order reception, Hub & Spoke style delivery, and settlement in consultation with the operating company. This will be delivered quickly and accurately through standardized personnel and equipment, IT utilization, and database-based customer management.

Moreover, by scaling the business, the corporation plans to maintain low commission rates to minimize the burden on distributors.

The joint delivery system introduced for the first time in a nationwide public agricultural wholesale market is expected to bring innovation to the market’s logistics system. According to the systematic system, product protection, traffic and safety accident reduction, improvement of working conditions, and reduction of noise and pollution complaints will be achieved.

Additionally, logistics transport equipment and storage area can be reduced by approximately 53.7% (from 4,100 units to 1,900 units), and logistics costs are expected to decrease by about 31.9% (from 235 billion KRW to 160 billion KRW).

After the successful implementation of joint delivery in Vegetable Building 2, the corporation plans to expand joint logistics to Vegetable Building 1 and the Seafood Building by 2027, and to the Fruit Building by 2030. Furthermore, it will strive to realize a future wholesale market through logistics innovation linked with smart technologies currently being actively promoted, such as the electronic delivery note system and automated delivery robots.