Samsung SDS is increasing its presence in the transport logistics industry by expanding its fourth-party logistics segment based on its business associated with the parent Samsung Group.
According to industry sources, the logistics business unit of Samsung SDS recorded 2.4 trillion won (US$2.1 billion) in sales last year. The amount is highly significant in that it had stood at 500 million won or so in 2011, 627.6 billion won in 2012, and 1.8359 trillion won in 2013. In addition, the ratio of the business unit’s sales to the gross sales of Samsung SDS increased from 10 percent to 26 percent, and then to over 30 percent between 2012 and 2014.
At first, Samsung SDS was an IT service provider. The company set foot in the distribution industry in 2011, when it developed the logistics IT platform Cello at an investment of more than 100 billion won (US$89 million). Samsung SDS has since added transport logistics to Cello's portfolio, while maintaining its major focus on B2B services. The platform provides optimal solutions in connection with global distribution companies without requiring any transportation vehicles or loading docks.
Samsung Electronics has adopted the Cello platform for its own physical distribution in Southeast Asia, Europe, and North America, and is planning to do so in Latin America this year. It is also planning to sell the service to third parties. The idea is to add 500 billion won (US$445 million) each to its logistics business sales associated with the Samsung Group and third parties within two years. According to stock market analysts, the logistics business division of Samsung SDS is forecast to record 3.2 to 3.4 trillion won (US$2.8 to $3.0 billion) in sales this year.