Improving Efficiency in the Logistics Sector for Sustainable Transport Development in the Republic of Korea

Freight transportation has increased very rapidly in the Republic of Korea owing to economic growth and expanding international trade. However, the freight transport sector in the Republic of Korea has been regarded as inefficient and the inefficiencies can be attributed to many factors, including an outdated regulatory framework, business practices and a lack of proper infrastructure. Since freight transport demand is derived from economic activities that are expected to grow in the future, improving efficiency in the sector has important implications for sustainable transport development in the country. In the present paper, the past trends and characteristics of domestic freight transportation in Korea are examined. The modal shares of domestic freight transport are analysed and future freight volumes by different modes are estimated, based on current trends and an alternative scenario in consideration of the proposals for future investment in transport infrastructure development. The effects in terms of greenhouse gas emissions for these two alternative future freight transport conditions are examined. The causes of inefficiency in the freight transport sector in the Republic of Korea, which includes infrastructure capacity problems, regulatory framework and business practices, are also discussed. The previous and ongoing efforts to improve efficiency in the logistics sector through policy measures are discussed. The policy measures focus mainly on a modal shift to environment-friendly modes, infrastructure provision and enhancing operational efficiency. Finally, an estimate of the potential reduction in CO2 emissions as a result of these efforts is presented. * Head, Transport Environment Research Division, The Korea Transport Institute, Daewha-Dong, IlsanGu, Koyang City, Kyunggi-Do, Republic of Korea.