|▲ Han Yeon-sik (left) and Alfred Hao, General Manager of China's marketing office (right), met at the headquarters of Smart Logistics in Yongsan-gu, Seoul on December 19 of last year. Photo = Reporter Hyeong-taek Lim, Economic Review|
[Economic Review = Reporter Ga-young Lee]
Three years have passed since the world's seventh-largest and Korea’s biggest shipping company, Hanjin Shipping, applied for the corporate rehabilitation procedures (receivership) on August. 31, 2016. Hanjin Shipping had disappeared into history after being declared bankrupt within six months of filing for receivership, but the aftereffects on the shipping and logistics industries still remain.
However, some companies have taken advantage of the crisis, turning it into an opportunity to make a leap forward. "Economics Review" visited Yongsan-gu, Seoul on December 19 of last year, where Smart Logistics is headquartered to listen to the story of the CEO Yeon-sik Han.
“Hanjin Shipping Situation, an Opportunity to Make Our Name Known in the Chinese Market”
Smart Logistics, a logistics company opened in 2010, is engaged in international logistics arrangements, such as multimodal freight and project freight. It can be regarded as arranging transportation-related work until goods are delivered to the final destination of a client or an importer at the request of a shipper who can be an exporter or a producer.
Yeon-sik Han, the CEO of Smart Logistics, is an expert who has worked for more than 20 years at logistics companies alone. Starting with Metro Logistics, an affiliated company of Heung-A Shipping in the past, he started his personal business in 2010 by building his career in Seamax Express. With Han's experience and expertise, Smart Logistics was able to secure a stable business with clients based on its years of working with shippers and sales capabilities.
Smart Logistics has entered the Chinese marketing business in earnest since the summer of 2015 when a huge trade volume between South Korea and China caught its attention. In the process, the company also established strong ties with a reliable partner, Alfred Hao, the current General Manager of the marketing office in China.
"It was a great luck for us to meet General Manager, Hao," Han said. "The meeting with him was an opportunity for the company to achieve fully-fledged growth and we are still growing together as a family," he told us.
|▲ Yeon-sik Han (left) and Alfred Hao, General Manager of the marketing office branch in China (right), came to Smart Logistics Busan office. Source = Smart Logistics|
Smart Logistics, which had continued marketing for more than a year, is faced with both crises and opportunities simultaneously, as it suffers from the bankruptcy of Hanjin Shipping. In September 2016, Hanjin Shipping, the largest national shipping company at the time, went bankrupt after undergoing receivership. This left countless quantities of cargo stranded at Busan Port.
However, Smart Logistics was handling cargo faster than any other company – this became a big PR news, conducted by the marketing office in China. This became an opportunity for Smart Logistics to make its name known widely in China and achieve faster growth. Han recalled that the crisis was a breakthrough, despite that he had to go through the very difficult plight of making overdue payments such as deposits and working to replace containers.
After proving its marketing capabilities in the event of Hanjin Shipping, Smart Logistics has entered into an area of various freight transportation that is not handled by general companies. The decision was based on the judgment that the company could provide differentiated services from other companies only if the transportation experience for special cargo is provided.
As a result, the company has consistently accumulated experiences in transporting special cargo such as ▲ special air freight, refrigerated, and frozen freight, ▲ high-risk ISO TANK freight, ▲ heavy freight, ▲OUG (OUT-OF-GAUGE) freight, and ▲ bulk cargo.
In particular, Smart Logistics has been heavily investing in air cargo with the joining of WCA, the Overseas Transportation Consultative Group, in 2016.
While the existing cargo was mainly shipped by sea in large volume of mass-produced items, the portion of air freight has widened due to the recent increase in the number of small quantity production and transportation of consumer goods. In response, Smart Logistics started to quickly target overseas markets by dealing with heavy and large air freight, which are difficult to handle in express delivery, through directly signing contracts with overseas dealers of TNT, a global logistics company.
As a result, the company was able to participate in transporting the stage facilities of the 2018 semifinal and final competitions of the online game "League of Legends" (LoL). It also had great achievements in winning contracts of very difficult cargo with expected schedule, such as conducting air and sea cargo for K-pop concerts like BTS and related events.
|▲ Employees at the headquarters of Smart Logistics. Source = Reporter Hyeong-taek Lim, Economic Review|
Looking for another leap in the face of the 4th Industrial Revolution, … Planning of AI Logistics Platform
“Smart Logistics has continued to grow 20 to 30 percent annually over the past nine years, and it will continue to grow in the future," the CEO Han said. "Whenever we face a difficult crisis, the willingness and sacrifice of our employees to actively work together have been a huge boost," he added.
With the timing of the 10th anniversary next year, Smart Logistics is seeking for an opportunity of business expansion that is a little different from the growth it has seen so far.
What Han is paying attention to is the Fourth Industrial Revolution. From the perspective of the carrier playing a significant role in overseas transportation, the CEO's concern was reflected as far as how to establish an innovative position while going along with the trends of the times. In fact, the logistics sector is notorious for its slow transition to digitalized work.
To achieve this, Han plans to enter the AI Convergence Department of Global Cyber University, to receive training and sign MOUs starting from 2020. The plan is to transform the logistics system into artificial intelligence through the long experience and practices of Smart Logistics’ overseas logistics and to develop an artificial intelligence logistics platform in that process through standardized information sharing with various shipping companies, airlines, and other cooperative carriers.
|▲ Smart Logistics plans to invest in EL SoftTech, a safety content software company regarding elevators, and have discussions for joint business development in the future. Source = Smart Logistics|
In addition, Smart Logistics plans to invest in EL SoftTech, a safety content software company regarding elevators, and have discussions for joint business development in the future. Established in late 2019, EL SoftTech is a software startup that advocates industry-wide digitization, including elevators. It is fully devoted to developing products with the goal of providing companies and institutions with platforms, elevators Ethernet and practically verifiable solutions that utilize AI, AR, and VR, and plans to unveil part of its elevator education platform within the first quarter of 2020.
"Although Smart Logistics is only a small forwarder in Korea, I hope to create a company that young people want to enter while no one wants to leave," the CEO Han said. "To achieve this goal, we will put forth our best efforts to create a smarter world with people who dream of innovation."