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Incheon City / 'Half-price home delivery for small businesses' support project started in October

'Half-price home delivery for small businesses' support program to start in October

Utilizing 57 Incheon Subway stations to build an eco-friendly joint logistics network

2024/05

The city of Incheon has announced the launch of the 'Incheon Small Business Half-Price Home Delivery' project.

As a first step, Incheon City will install small business courier collection centers at 30 of the 57 stations on Incheon Subway Lines 1 and 2 from October this year to June next year, and support half-price courier services that are 50% lower than the average price of the courier market for all small businesses directly received at the collection centers, with a limit of 120 cases per year. In addition, we will provide an unlimited number of in-person pick-up services for small businesses, which will save 25% compared to the average price of the courier market.

In the second phase, which will be implemented from July 2025, the service will be provided at all 57 stations of Incheon Subway Lines 1 and 2 by installing collection centers.

The core of the project is to reduce logistics costs for small businesses and strengthen the logistics competitiveness of small businesses through fast delivery. 72% of small businesses in Incheon have an average monthly delivery volume of around 10 packages, making it difficult to contract with existing courier companies for such small volumes, and they had to pay high unit prices. In addition, large courier companies do not offer same-day delivery products for small businesses, making it difficult to use same-day delivery, which is popular among consumers.

To solve these problems, Incheon City conducted the 'Small Business Joint Logistics Center Operation Demonstration Project' for seven months from July last year to January this year, collecting small parcels from small businesses and contracting with existing courier companies in batches to lower the unit price of parcels and provide pickup and same-day delivery services for even a single package, and analyzed the results.

According to the Incheon Institute's analysis, courier prices were about 25% lower than the market average, and delivery times were reduced by more than 50%. In addition, 23% of the 560 participating businesses entered the online shopping market, showing that the policy was effective in supporting small businesses, with annual sales per business increasing by 10.7% due to reduced courier costs and expanded online sales.

To minimize the financial burden, the city of Incheon decided that expanding to the existing method of pickup by electric freight cars would require a budget of 20 billion won per year, but if the city builds an eco-friendly logistics system that utilizes 57 stations and subways in Incheon Subway in parallel with the current collection method, it can continue to operate with a relatively small budget, and once the system is stabilized, 3 million Incheon citizens can use home delivery at a 25% discount without additional financial burden.

“The 'Incheon Small Business Half-Price Home Delivery' project, which utilizes an eco-friendly joint logistics network linked to the subway, which Incheon is the first city in Korea to implement, is a new paradigmatic policy that protects small businesses and responds to the climate change crisis through carbon reduction,” said Kim Eul-soo, Director of the Korea Maritime Administration.