The CL (Contract Logistics) division of CJ Logistics announced on the 26th that it expects new orders this year to reach approximately KRW 730 billion, marking a 40% increase compared to last year’s KRW 530 billion. The CL division includes W&D (Warehousing and Distribution) and P&D (Ports, Handling, and Transport), which has been a core business for CJ Logistics since its establishment in 1930, consistently showing stable profitability with an average operating profit of KRW 121.4 billion over the past five years (2019-2023).
Breaking down the orders by business unit within the CL division, P&D has seen a 14% increase over the previous year, at KRW 410 billion, while W&D has surged by 98%, reaching KRW 320 billion. Consequently, CJ Logistics will open new centers with a total area of approximately 577,000 square meters (175,000 pyeong) by next year, comparable to 81 soccer fields (2,160 pyeong per field).
The achievements in order intake are reflected in the CL division’s performance, with cumulative sales and operating profit for the third quarter this year recorded at KRW 2,202.3 billion and KRW 135.1 billion, respectively. Compared to the previous year, sales increased by 4% and operating profit by 16.8%, driving growth for the entire company. Additionally, the company expects even faster growth in the CL division next year, with an expansion in cooperation with the Shinsegae Group and the commencement of sales related to new orders.
The key to the expansion of orders in the CL division is CJ Logistics’ logistics consulting, which involves sharing their logistics expertise with client companies. Logistics consulting includes offering tailored solutions for specific industries, center design, and fulfilling SCM (supply chain management) roles from delivery to operations. CJ Logistics holds the largest specialized logistics consulting organization in the nation, providing comprehensive consulting in the SCM/logistics field grounded in 94 years of accumulated expertise and distinctive capabilities. Furthermore, by incorporating advanced technology from the TES Logistics Technology Research Center into its consulting, CJ Logistics contributes to enhancing the logistics efficiency of its clients.
For instance, a major health and beauty company, Company A, improved storage and work efficiency by 42% and 10%, respectively, through CJ Logistics’ consulting, which included automation technology and simulation techniques. Similarly, an e-commerce company, Company B, is expected to expand its delivery area and reduce logistics costs through collaborative solutions with CJ Logistics.
Among this year’s significant contracts was the logistics agreement with the Jeju Special Self-Governing Province Development Corporation signed in May for Samdasoo water. The comprehensive nationwide logistics infrastructure, 3PL (third-party logistics) operation experience, and logistics consulting capabilities significantly contributed to winning the contract.
During the “Samdasoo contract competition,” CJ Logistics emphasized logistics cost reduction and ESG (Environmental, Social, and Governance) enhancement to the Jeju Special Self-Governing Province Development Corporation. They proposed a management improvement plan including 100% indoor storage with 65% increased storage efficiency, along with first-in-first-out and inventory balance improvements using in-house logistics simulation. They also highlighted a potential reduction of approximately 690 tons of carbon emissions, gaining high marks from the corporation that values ESG management as a core value.
CJ Logistics plans to further advance its differentiated logistics consulting to focus on both quantitative and qualitative growth in the CL division. Additionally, by continuously securing cases of logistics efficiency maximization for clients through consulting, they aim to establish a “win-win” model for both logistics companies and clients.
Do Hyung-jun, CJ Logistics’ head of sales, stated, “Based on industry-specific customized consulting, the customer order volume transitioning from 1PL (first-party logistics) to 3PL (third-party logistics) is expanding. We will secure a unique growth momentum through smart logistics solutions that will lead the innovation in the logistics industry.”