News Content

DHL tells Korean customs to lighten up if they want to help e-commerce

KOREAN Customs must lighten up if they want e-commerce to thrive in the country, says Germany's DHL Express.

Korea needs to make its customs flows as efficient as the data flows," said Richard Yee, DHL custom and regulatory affairs chief for south Asia.

Speaking at The International Air Cargo Association (TIACA) Air Cargo Forum in Seoul, Mr. Yee said: "Korea has a high level of customs inspections compared to Hong Kong and Japan. It creates costs for logistics companies and customers."

Mr Yee told delegates that forwarders were unable to submit data directly to Korean customs, and that plans to move express operators to separate screening areas would delay shipments, reported London's Loadstar from Seoul.

"We tend to see large volumes, small packages and high customer expectations over returns and track and trace. It needs to be cost-effective," he said.

Noting that even low-risk import and transit shipments were subjected to 100 per cent screening, he called on Korean Customs to focus instead on higher-risk cargo.

Korea also has a low rate of duty exemption, set at US$100, compared with Australia's rate of $1,000 and Singapore's $400.

"This is very important for e-commerce. And the cost of collecting duty above $100 could be higher than the duty itself. Why not put it in line with passenger requirements, which are $600 worth of duty-free?

"We've seen a slowdown in air cargo growth and the world economy, and a move of low-value manufacturing out of Korea. But there is growth in the express and e-commerce market. Korea needs to be competitive and tap into this growth. Incheon is good but the government should be looking at how it can do better," Mr Yee said.

Hye-sun Lee, deputy director of the Ministry of Land, Infrastructure and Transport, said the government was working hard to improve stagnant volumes at Incheon, the world's fourth biggest cargo airport.

"E-commerce is increasing by eight per cent a year and our customs regime is changing to support it," she said.

Ms Lee said volumes have shifted to the port. "We are trying to increase air by diversifying into perishables and express which have high demand," she said.

But David Hoppin, a consultant and CEO of Diio, warned that there could be more structural problems and that e-commerce may not boost air cargo.

"A lot of growth in B2C will be less likely to go by air. Most will go by surface as air is too costly," he said. "And better speeds and predictability of ocean are coming."