CJ Logistics, which handles deliveries for Shinsegae Group's online mall SSG.com (Sseuk.com), will have to pay additional expense. Sseuk.com outsourced logistics operations in some regions to CJ Logistics, but customers complained about delayed deliveries, wrong deliveries, and poor packaging.
According to the logistics industry on the 16th, Sseuk.com estimated and conveyed the additional amount incurred after transferring logistics for western Seoul and the greater metropolitan area to CJ Logistics in Jul. The additional expense is said to be in the hundreds of millions of won. CJ Logistics is negotiating the specific compensation amount based on the figure Sseuk.com estimated.
The delivery problems arose as Sseuk.com scaled back its in-house delivery service "Sseuk Delivery" and entrusted operation of the Gimpo NEO logistics center to CJ Logistics. Cold insulation packaging for frozen and fresh foods was not done properly, resulting in products being delivered damaged or deliveries being delayed by several hours. Additional expense occurred after a large increase in cold packs.
Previously, dedicated delivery drivers at Sseuk.com handed products directly to customers from the NEO center. After outsourcing logistics to CJ Logistics, an additional step was added in which delivery drivers moved items taken from the NEO center once more to the company's own logistics center for sorting. CJ Logistics drivers delivered regular parcel cargo and Sseuk.com items together.
After the problems emerged, Sseuk.com and CJ Logistics spent hundreds of millions of won to add another layer of cold insulation for refrigerated and frozen foods and to increase the number of couriers. CJ Logistics said that since mid last month it has recorded an on-time delivery rate of 99% and has had no packaging damage issues.
Sseuk.com and CJ Logistics plan to strengthen synergy through cooperation in the retail and logistics institutional sector. Sseuk.com plans to improve performance by expanding its delivery coverage nationwide through collaboration and cutting expense. CJ Logistics aims to secure stable revenue by expanding its contract logistics (CL) business, where its share is lower than competitors.
Last year, CJ and Shinsegae signed a business partnership agreement and have been broadening areas of cooperation. They are reportedly considering collaboration in content beyond food and logistics. The two companies' partnership also drew attention as a "cousin alliance," given that CJ Group Chairman Lee Jae-hyun and Shinsegae Group Chairman Chung Yong-jin are first cousins once removed.