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South Korean steel giant POSCO is set to institute a system that will allow small and medium enterprises that are its clients to ship their goods with those being exported by the steelmaker. POSCO has developed the system based on the needs of SME clients, which faced difficulty in securing vessels to ship their smaller quantities of goods. As they were competing with larger shipments, this subjected the companies to higher fees and difficulty in meeting deadlines, resulting in poorer export competitiveness.
POSCO has trial operated the system since September. During the trial period, a total of 42 SME clients loaded 56,000 tonnes of goods with POSCO shipments, saving 1.1 billion won in logistics costs
When it officially begins later this month, clients will be able to check vessels on which they can load their goods and make registrations. Up until now, clients have had to directly inquire with shipping companies to check when loading took place and make loading requests.
POSCO said the system is set up to benefit not only exporting clients but also shipping companies, so that the entire logistics value chain would see a boost in competitiveness. The system is beneficial for shippers because they are able to boost sales by securing additional goods. They can also reduce costs because they do not need to make stops at other piers to fill up cargo space when they are short of orders.
POSCO also gains because it is able to reduce dead freight costs, which refer to payments made when the charterer of a ship fails to utilize space reserved on a vessel.