The 1st Future Life Logistics Conference “Human Network is Infrastructure”

 

 

 

 

The 1 st Future Life Logistics Conference

“Human Network is Infrastructure”, CLO aims to become a ‘logistics Airbnb’

 

Now, it is an era of ‘Same day delivery’
E-commerce businesses are investing huge amount of money to improve their logistics system. They are now willing to achieve qualitative development for ‘fast & accurate delivery’ than quantitative growth by price competitiveness. Meanwhile, there are a number of delivery startups based on innovative delivery ideas. They are quickly entering the market with the solution to complete the ‘Last-mile’ delivery service.

< On April 3rd 2015, CLO hosted ‘The 1st Future Life logistics conference’ at Maru 180, Gang-nam, Seoul, South Korea. Maru180 is known to be a place for startups where they can get total solution for their new business. This conference aimed to share the thoughts about ‘last-mile’ and ‘Same-day’ delivery of Startups, academic world, traditional businesses, etc. and build an ecosystem for mutual cooperation.>

 

SessionⅠ. Logistics startup Big Bang, Convergence of industrial paradigm

Essence of Future life logistics, human & human
Professor. Jung Ung, Min / Graduate school of logistics at Inha University

 

There are people who utilized ‘Hub& Spoke’ system long before than FedEx. It is ‘Dabbawala’ in India. Many scholars got interested in their system and studied about them for a long time. There was even a SWAT analysis for Dabbawala. Why do people taking their time and energy to look over it? Then what kind of meaning does it contain? Now it is an era of forecasting with high-end technologies. Now, people can forecast and control everything. However, there is only one thing which high-end technology cannot forecast. It is human.

 

When we approach Dabbawala as an human approach, there are quite interesting factors. In the past, ‘Maratha Empire’ defeated the ‘Great Mugul’ and Dabbawalas are the descendant of ‘Maratha’. They have great pride in them that they are the ones who fought for the independence of India. As for this fact, they think that working is worshiping their god and delivering food to human is respecting the existence of human being. These things cannot be explained by science. These things can only be explained by our mind. Eventually, we have to focus on these thing for the future life logistics. We can only read the essence of future life logistics by human kind and thier mind not by massive data.

 

Necessity of developing Startups in Logistics industry
Professor, Do Hyun, Kim / Head of startup assistance institute at Kookmin University

 

Besides ‘last-mile delivery’, there are a lot of startups flooding into many other industries. Now we can see that in every sector of logistics industry there are new startups coming up. More, when we look at the investment trends in US, there are 3 parts which gets the most investment. They are E-commerce, Grocery, and at last, logistics software.

 

This phenomenon creates new ‘destruction’. It is true that startups cannot replace ‘FedEx’, however, there are lot of startups who are already watching for a chance to replace weak part of FedEx. That’s why the ‘startup fever’ in logistics industry is getting more interest. And I believe that one day, some part in this industry will be destructed by this movement. With this flow, there is enough potential for startups to become Airbnb and Netflix in logistics.

 

Session Ⅱ. Startup, Now it is time for logistics.

Last mile Delivery Portal, Mesh Korea
Jung Beom, Yoo / CEO of Mesh Korea

 

What I want to present today is about ‘Mesh Prime’ which would enable ‘2 hour delivery’ and ‘5 hour delivery’. ‘Mesh Prime’ is a delivery platform for quick riders, which offers delivery system in a cheaper price. It is open to public so that ordinary customers can utilize it as well. We are proud to launch MeshPrime.com on April, 20th this month. And the lowest price for this quick service is around ￦7000 (which is about US $7). This platform supports drivers with optimal orders which is from diverse e-commerce system and these orders are gathered by Mesh Korea’s own API.

 

Meanwhile, our goal is to increase welfare of quick riders as it will activate domestic market and its flow. We all know the fact that we need to share more with the people who are devoted to this kind of intensive labor and hard work like delivery.

 

Why does ‘Shadal’ never get paid?
Seok Won, Choi / CEO of Campus: DAL

 

Actually, application ‘Shadal’ was not created as a starup and its goal was not for profit-making as well. We developed this application ‘Shadal’ because the students in my school needed it. To be honest, making money using Shadal will be extremely easy. We can just collect fees from the users and restaurant owners. However, we don’t. Why? Because we all think that it is not cool. What if, one of my friend at school asks me about one restaurant. What if he asks, ‘why did this restaurant disappear from you app list even though they have good food?’ For that, If I say ‘they did not pay us so that they could not enter our list.’ It is So not cool.

 

Currently, our team ‘Campus :Dal’ we have 20-30 people. And it is almost a community now. In my opinion, even though it is not for Campus:Dal, I still think if I start something more fun, something more new for customers with these people, it would be great.

 

Special delivery service for you
Jae Kyu, kim / CEO of IH soft

 

Mover is trying to solve the ´trust´ problem using a cooperation platform. But at first we faces many pre-existed platform´s resistance, telling us ‘Isn’t it an invasion of market if anyone providing this kind of services?’ We needed good amount of time to persuade these pre-existing businesses and system. While we were persuading drivers, we found out that there are many difficulties and inconvenience in current existing system. And we thought that ´Mover´ can be an answer for those problems. This can be the same to small parcel delivery.

 

After all, ´human´ is the main factor in delivery service. ´human´ is the one who delivers physical product and who delivers customer´s mind as well. And now, I ask traditional businesses for many good advices since our business is new in this market. And we will do our best to provide better service based on this feedbacks.

 

Real time logistics system based on local strategic point for ´On-demand Service´
Moon jin, Yoon / CEO of Honeybees

 

The green lines on our map show you the flow of one messenger’s trip in 3 hours. It is quite ridiculous and messy movement if it were to be a route for a general delivery service. The On-demand service provided by ´Honeybees´ is carried out going and repeatedly going through the cities drawing diagonal lines continuously. So this can be an evidence that we are providing ´On-demand service´. If this service happens more and more, real time spot is going expand. And if there are more demands, more fast delivery can be realized based on the spot from pre-existing logistics center.

 

There are many important elements for this ´real time logistics process´ but the fundamental factor is ´Messenger´, the deliverer. If we can’t stably manage them, the risk of the service increases. Actually, the employment stability brought the change in their attitude and it made higher customer satisfaction. Finally we got loyal customers. And the profit which we got from this healthy cycle is fully utilized for messenger environment improvement.

 

Session Ⅲ. The age of ´Last mile´, forecasting the future of logistics.

´Urban logistics and the role of startup´.
Sang Beom, Seo / Director of integrated logistics authentication center in Korea Transport Institute

 

It is same for the startups who just entered into market. If they lack of publicity that business model cannot be successful. If we take a look at ´Silver parcel service´ of CJ Korea Express, they get support from Ministry of Health and Welfare. Because their service has ´publicity´. If we can make win-win situation for local community, government and logistics company, we can make an efficient link between customer through this service.

 

Eventually, ´How can we obtain publicity of business´ is the key point for urban logistics. The business model which excluded the social system cannot be maintained. On the other hand, I think we can get long-term business model if it can be combined with social system. This being so, startups need to request the policy for the base infrastructure which will enhance and activate urban logistics. Of course they will primarily need the basis to change the system. And for that publicity should be guaranteed.

 

The change of future logistics paradigm and Innovation of SCM
Jae hyeok, Eo / Director of logistics research institute in CJ Korea Express

 

Now, the classification of distribution and logistics is meaningless. Recently, the story that we hear the most is ´Coupang´ in logistics field. Personally, I don´t have any clue of what is the main business of coupang. Is it distribution? Or logistics? Alibaba is the same. Bringing lot of rumors about entering Korean domestic market nowadays. Let´s look at what kind of businesses Alibaba have. Online distribution, payment service, cloud computing, logistics, financial business and so on. It is hard to catch what this company is mainly focusing. But there is a common thing as by magic. All businesses of Alibaba is related with ´Platform´.

 

Would it be possible to talk only about ´logistics´ in Alibaba’s businesses? It is quite hard question to answer. Because of this, logistics research institute of CJ Korea Express predicts that the age of ´Platform logistics´ will arise soon. It means that now people will look at logistics through platform, not by just looking logistics as itself.

 

 

Session Ⅳ. A meeting between tradition and future, a link for mutual development

The 4th session continued as a way of sharing the opinion about ´mutual development and competition between traditional logistics companies and new logistics startup businesses.´ This session was led by professor Jeong ung, Min as facilitator. And here are the a series of questions and answers.

Jeong ung, Min : First of all, I will ask Cheol min, Kim, the chief editor of CLO who hosted this event. Actually, I didn´t expect that many people are interested in this ´Logistics startup´. What do you think of the situation that many people in this field are paying attention to ´last-mile’ and ‘Logistics startup´? I want to listen to your insight what you felt in the scene of making news and articles.

Cheol min, Kim : 4 years ago, When I started making CLO, I´ve often heard people saying about our magazine, "Is it a news? This is a novel.". But the story that ´Amazon and Google focusing on logistics´ is now on track in reality. This was the story I have been telling others at that time. And nowadays in Korea, this is happening as well. The major distribution companies such as Shinsegae and Lotte are investing vast amount of money into their logistics facilities. They try to find the distinction and differentiation of service under the age of delivery and last-mile. Even there is a company like ´Coupang´ whose delivery service is taken care by another distribution company.

 

The result is that there are many companies that break into market aiming at ´last-mile´. This movement is accompanied by the activity of logistics startup. To them, ´Human is an infrastructure´ and they provide new delivery service through opening up their infrastructure not just sharing the infrastructure that people already have. Now we have a worry about ´How can I deliver the product better?´ regardless of industry fields and we try to find which company can solve this question. And we have to observe which side will be the resolver, the traditional one? or the new startups.

 

Jeong ung, Min : And I´d like to listen the opinion of Sang Beom, Seo the head of center. We can see the sign of conflict between startups and traditional corporations surrounding hegemony. For instance, Coupang is a typical example that they can blow up all their logistics investments due to the regulation of Trucking Transport Business Act. Somehow, it is the reality that there are lot of rules and regulations which currently exists are restricting the activity of logistics startup. When we look at this, I wonder what is the right choice, ´making a rule for protecting traditional logistics corporations´ or ´growing the Industry´s pie through supporting for new startup businesses´.

 

Sang Beom, Seo : You’ve hit the mark. Firstly, the thing we have to build up is changing the regulation and framework. But changing the system is accompanied by conflict of interests. For example, ´Deliv´ is not that hard model but had trouble with the system when introduced. Because of this, when we plan to change the system, we have to get an acceptance of pre-existing stake holders. But this process is quite difficult.

 

Good new in this situation is that the current government´s stance is in favor for the appearance of new business model. If we use this chance well, I think we can get many things that we could not get until now. But as I said, the system will not be changed if we stay still. So people have to deliver their ´trouble or obstacle when working on logistics site´ continuously. And when they notify those kind of issues to us or in this forum, that’s when it can only be magnified and the system can finally change.

Jung Ung, Min : For the next, I will ask a question to CEO of new logistics startups and Director Jae hyeok, Eo of CJ KOREA EXPRESS representing traditional businesses. I am curious about the ideas that startups have and their know-how regarding IT will be competitive in the market with the pre-existing network that traditional logistics industry already had or it will build another business model through coexistence and cooperation. Or will there be another new relationship which totally different from the old ones?

Jung Beom, Yoo : The traditional businesses take a way to look down from higher places, while we have been using a manner to look up from lower places. So, We think that we will able to find some parts which the traditional business could not find in meantime.

Jae Kyu, kim : We know that we will never be able to become a logistics business by operating a logistics platform. We just graft IT into the existing logistics system. Moreover, “Mover” the service we provide, is a brand new service which never showed up in the market before. For this reason, we are looking at the same goal with the logistics business and hoping to increase the pie of whole market.

Moon jin, Yoon : Like other startup CEOs mentioned, our business model has nothing to talk about competitive relationship. Actually, we are continually finding a way to coexist with express companies. Eventually, we are not an alternative option to substitute traditional logistics companies. The goal of honey bees is by targeting the edge of Niche market, we are going to respond to the existing premium needs which resides in any industries.

Jae hyeok Eo : I appreciate a lot of startup ideas that I heard today. CJ KOREA EXPRESS is growing up by means of developing techniques and M&A.; Contracts were limited only with the logistics enterprise in the past, but now we are willing to invest into a company which has the technologies that we needed and do M&A.; The most thankful part is that the startups gathered in this conference today are trying to contribute to our society. If this trend lasts continually, this would give a huge benefit to us, CJ KOREA EXPRESS and even to other giant companies, also, this will be an opportunity for a coexistence that we have been looking for.

Jung Ung, Min : Lastly, I will give a question to Professor Do hyun, Kim. You are doing a lot of studies in venture policy consulting and lots of researches of real venture businesses, so I think you will have many know-hows. What do you think is a critical success factor for new logistics businesses that could keep loyal customers and safely entered into market?

Do Hyun, Kim : Now we are living in a creative destructing world. If the things here in this world do not work properly, people have passion to reconstruct it. Now, I think that ‘diversity’, ‘Agility’ or other things that logistics companies have is not enough. Also, I wonder what kind of results will come out from the merge of distribution and logistics.

 

so the old enterprises would protect their seats and not being cooperative. The reason why I love about startup is that people in startup do not plan ahead. The era of planning is over. We call it “Lean startup”, which means we instantly make and measure thing and we learn from it. In this procedure, the key depends on who learns the idea first. Therefore, people you’ve met today actually are moving forward and making a big step forward. The question is how we learn from each other and how we can share together. Is mutual learning possible? We need to think continuously. The market change will speed up in the future. There are many investors coming on to activate these things. It is important for us not be afraid of failure and move on and keep challenging ourselves.