Incheon City will officially launch a courier service next month that supports local small business owners by offering delivery at half the price of market courier fees.
The city announced on the 2nd that it selected Hanjin and V2V as the 'Half-Price Courier' delivery companies, and the service is scheduled to begin in the fourth week of October, after the completion of the collection centers at Incheon Subway Lines 1 and 2 stations.
As the first local government in the country to promote half-price courier service, small business owners can directly drop off parcels at the collection centers, which are then transported via subway and electric cargo vehicles to the collection points of existing courier companies for final delivery. Previously, the city allocated a budget of 3 billion KRW for the half-price courier service in the first supplementary budget.
Small business owners can use the half-price courier service up to 120 times annually. The courier fees are 1,500 KRW for standard delivery based on a package weighing 5 kg or less and measuring under 100 cm, and 2,500 KRW for same-day delivery within the metropolitan area (Incheon excluding Ganghwa and Ongjin, Seoul, and Bucheon in Gyeonggi Province). Standard delivery is 2,000 KRW cheaper than the market average price (3,500 KRW), and same-day delivery (4,400 KRW) is 1,900 KRW cheaper. The pickup service at business locations costs 2,500 KRW for standard delivery and 3,500 KRW for same-day delivery, approximately 25% cheaper than the market average.
The city expanded the pickup service, which was previously limited to 1,500 businesses, to all 370,000 small business owners in Incheon (excluding Ganghwa and Ongjin) starting in July. Additionally, among the 57 stations on Incheon Subway Lines 1 and 2, 30 stations currently operate courier collection centers, and the city plans to operate collection centers at all stations starting July next year.
Until now, 70% of small business owners in Incheon sent an average of about 10 parcels per month, making it difficult to contract with courier companies. There were many issues such as high unit costs and the inability to offer same-day delivery when contracts were made.
To address this, Incheon City commissioned the Incheon Research Institute in January this year to analyze the results of the 'Small Business Joint Logistics Center Pilot Project.' The core of this project is to exclude logistics warehouses from the delivery process to shorten delivery times and to bundle small quantities shipped by individual small business owners to collectively negotiate unit prices with courier companies, significantly reducing delivery fees.
The analysis by the Incheon Research Institute showed that due to shortened delivery times and reduced courier fees, 23% of small business owners newly participated in the online shopping market, and the annual sales per business increased by 10.7%. Additionally, compared to the existing courier system, vehicle travel distances were reduced by 13%, resulting in a carbon emission reduction of over 25%.
An official from Incheon City stated, "The half-price courier support project expands the effects of the existing Small Business Joint Logistics Center Pilot Project to all 370,000 small business owners in Incheon by linking with the eco-friendly transportation mode of the subway. We expect positive effects such as increased annual sales for small business owners and reduced carbon emissions."
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