POSCO will launch an integrated logistics affiliate, tentatively named POSCO Global Smart Platform (POSCO GSP) by the end of 2020, the steelmaker announced on May 20.
The affiliate will integrate contracts and manage the operation of transport volume in POSCO and its group companies. It also plans to support establishing smart and sustainable infrastructure within logistics partners, and enhance logistics efficiency and boost synergy.
As of present, various transportation contracts related to the purchase of steel materials and sales of products are spread across different departments within POSCO. The logistics function is also dispersed among various affiliates, such as POSCO International, SNNC, and POSCO C&C. By integrating the logistics operations into a single company, POSCO aims to promote efficiency and improve expertise while eliminating redundancy.
Since the transport volume of the steel industry amounts to large numbers, global steelmakers in Europe, Japan, and China are already operating logistics-specialized affiliates to enhance logistics efficiency and improve expertise.
In 2019, POSCO Group’s total transport volume of goods recorded around 160 million tons with logistics costs reaching a scale of 3 trillion won. However, the current logistics operations of POSCO are widely scattered among group companies and function as a support for sales and procurement alone.
The affiliate aims to increase efficiency by integrating logistics services — such as establishing transport plans and contracts of raw materials and products — and grow into a logistics platform based on Artificial Intelligence and robot technology.
As a measure to promote smartization, the company plans to share its smart factory technology with logistics partners. The ‘AI wiring system,’ which applies Artificial Intelligence and Big Data technology, is one such example. This system reduces losses and costs by minimizing the standby time of ships at the port. The achievement is shared with logistics partners, and this win-win strategy is also expected to strengthen the industrial ecosystem.
In response to stricter international environmental regulations, the integrated logistics affiliate will build a sustainable logistics infrastructure with its partners. The affiliate will cooperate with domestic shipping and shipbuilding companies to carry out the following tasks: installing ship desulfurization facilities and introducing LNG-powered vessels, converting port facilities operated by diesel engines into electric power, and operating eco-friendly vehicles.
In addition, the affiliate is to institute a direct contract method with freight owners as a measure to promote fair competition and shared growth. A mobile platform will be introduced where freight owners can directly participate in the bidding, and settle freight transportation and shipping charges.