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Logistics Tenant Profile # 13 Siheung·Ansan – Logis-City of Tomorrow

Carter Kim • 26/02/2024

Siheung and Ansan areas can access major cities such as Seoul, Incheon, and Suwon, a densely populated area within one hour by taking advantage of the wide-area transportation network. It is emerging as a logistic base for e-commerce retailers. 

Since 2019, the supply of new logistics centers has increased rapidly, especially in industrial complexes (Sihwa-Banwol, Sihwa MTV). In particular, by absorbing ‘import, processing, distribution’ warehouse demands, it is widely used as a logistics base for manufacturing companies such as Hanssem and Korea Paper.

It is planned to supply a large-scale logistics center of 483,000py by 2026, which is about 2.8 times more than the existing supply. Due to the worsening investment environment, only about 46% of construction has begun, actual supply by 2026 is likely to sharply decrease than expected. 

Logistics centers in Siheung and Ansan continue to become larger, and as abundant residential demands and improvements in transportation infrastructure have led to active population growth, the location value as a fulfillment center is expected to increase further. 

3PL logistics companies occupy the largest area, followed by e-commerce, manufacturing, F&B, and distribution. 

In Siheung and Ansan, 3PL companies such as Logis Valley, and LX Pantos operate logistics centers. Recently, fulfillment centers for e-commerce companies such as Coupang and FASSTO have been running. Additionally, manufacturing companies’ logistics centers such as Hanssem and Korea Paper are located.

Following the Seoul announcement of ‘Cleaner Seoul 2030’, class 4 vehicles will be restricted in all areas of Seoul from 2030, and all internal combustion engine vehicles will be restricted from 2050. It is now possible to apply for a license exclusively for courier delivery with eco-friendly fuel trucks.

Considering that approximately 90% of delivery vehicles are currently diesel vehicles, acceleration of the transition to eco-friendly vehicles is inevitable. Leading to the rise of cost delivery, the value of urban logistics hubs capable of multi-rotation transport in a short distance will further increase.

To prevent global warming and the climate crisis, imposing a carbon tax has become prevalent across the nation. Korea is also likely to impose a carbon tax shortly. 

When a carbon tax is imposed, it is expected to cost at least 3 to 5 million won per freight vehicle every year, which brings about further increase in delivery costs.

In response to a tendency to restrict diesel and impose carbon taxes, distribution and logistics companies are also focusing their efforts on establishing green delivery systems. In addition to introducing eco-friendly vehicles such as electric and hydrogen vehicles, they are building delivery centers equipped with charging solutions and optimizing logistics networks.

 

 

 

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