1. Background

The combined trade volume of Asia and the EU accounts for 35.4% of the world trade volume (US$3.6 trillion); and trade transactions between Asia and Europe reach about US$360 billion annually and are on a steadily upward trend.

There has been considerable discussion on ways to increase the trade volume between Asia and Europe and also many efforts to identify ways to reduce the business complexities and costs for international traders. Among these, simplifying trade procedures is considered the most effective and practical solution. This is the background behind building the e-Trade Hub, called Paperless Trade Network, in ASEM.

The e-Trade Hub can be referred to as a platform for converting the international trade process into a paperless system and for exchanging trade-related messages electronically between trade partners. This project is proceeding well and according to schedule.

While efforts to realize the e-Trade Hub are actively in progress, a new need has been identified to combine e-logistics services with the e-Trade Hub in a suite. As a combination, the suite of e-trade and e-logistics services could provide much greater ROI (return on investment) with higher added value to trade community members.

It is difficult to separate the business processes of trade and logistics from each other. In addition, the integration of trade and logistics services in terms of sharing and reusing information will surely be instrumental in simplifying and rationalizing international business procedures. Thats why now is the time to emphasize the necessity of e-logistics.

2. e-Logistics in Korea

With the rapid growth of broadband high-speed Internet users in Korea since the mid 1990s, a new business channel has emerged and become profitable. This channel is e-commerce. One of the many business models to be developed based on e-commerce is the e-marketplace. More than 30 public e-marketplaces, taking the form of B2B e-marketplaces, are either in service or under development in line with the initiative by Koreas Ministry of Commerce, Industry and Energy (MOCIE) in response to the demand from private industry to facilitate e-commerce in Korea.

There was a similar demand in the field of logistics to establish an efficient, nationwide logistics management system. This demand resulted in the formation of Korea Integrated Logistics Consortium (KILC), which is funded and backed by MOCIE and 20 private logistics service providers. The backbone represented by KILC is e-logistics functionalities that improve logistics performance and reduce costs. The primary objective of KILC is to link trading companies and logistics service providers in a single-window business environment.

It is well known that there is a wide range of logistics service providers, from port community service providers, shipping lines, and freight forwarders to third-party logistics companies (3PL). With mutual consensus and cooperation between logistics-related companies and KILC, the first e-logistics service model is close to being realized in Korea.

ASEM e-logistics service (2)