South Korea to overhaul trucking industry with new freight rate system

South Korea to overhaul trucking industry with new freight rate system [Photo by Park Hyung-ki]

The Korean trucking industry will get a major makeover as the government seeks to change to the customary practice of leasing out cargo truck license under reform efforts.

The Ministry of Land, Infrastructure and Transport and the Korea Transport Institute on Wednesday announced the trucking industry reform plan after holding a public hearing. The government will seek to change related laws accordingly.

The major change in the planned trucking industry is modifying the freight rate system to charge for shipping service based on a standard price table. The new rate system will only serve as a guideline without any mandatory requirements.

This will replace the freight fare system with legally defined minimum rates, which was phased out in late 2022.

The new freight rate system will be implemented until 2025 before it is fixed into the law.

The government will enforce the minimum shipping rule, which has become to in name only.

Introduced in 2011, the minimum shipping rule requires freight transportation companies to handle at least 20 percent of all shipping service orders with in-house truck drivers. It was implemented to regulate the customary market practice of big companies leasing out commercial truck license plates to truck drivers for large fees.

The government will also ease rules to allow more new entrants into the cargo trucking industry, the first move since 2004.