top of page

Discussion of ‘standard wage system’ instead of minimum wage system

While the government is discussing the overall reorganization of the logistics market, a plan to introduce a non-forced standard fare system instead of the sunset safe fare system has been proposed. There was also a proposal that the road registration system, which is criticized for “license plate sales,” should be abolished.

On the afternoon of the 18th, the Ministry of Land, Infrastructure and Transport and the Korea Transport Institute held a public hearing on the “plan for normalizing the freight transportation market” at the Post Tower in Jung-gu, Seoul. At the public hearing, the basic direction and detailed tasks presented by the 'Logistics Industry Development Council', which is composed of shippers, transport companies, borrowers, and experts, were discussed.

First, the need to introduce a standard freight rate system after the abolition of the safe freight rate system for trucks was discussed. The safe fare system was introduced with the intention of preventing overwork, overloading, and speeding by guaranteeing appropriate wages for cargo transport workers, but was abolished at the end of last year after the collective transport refusal by the cargo union.

Unlike the safe fare system, the standard fare system is a kind of standard fare guideline that is not enforceable. It is argued that the foundation for coexistence can be laid by preventing unnecessary conflicts between shippers, transport companies and borrowers by rationalizing regulations while preserving the real income of borrowers.

In addition, opinions were suggested that the punishment provisions for shippers violating the safe freight rate system should be deleted or alleviated. Instead, there were discussions about strengthening the management of shippers' payment of appropriate freight rates and strengthening the role of the safe freight reporting center.

The abolition of the land transfer system was also discussed. The land transfer system is a method in which borrowers register their personal vehicles with a transportation company that has a freight transportation business license, operate a transportation business, and pay land rental fees. Abusing the restriction on the issuance of new truck transport licenses, companies that lend only license plates and collect fees are rampant and are pointed out as a representative malady.

In the consultative body, opinions such as the need to abolish the license system and supply and demand control were exchanged as maintaining the transfer system is the main cause of market entry regulation. There was an opinion that the current minimum transportation duty ratio of 20% should be significantly raised, and if it falls short of this, the company's business rights should be taken away and personal permission should be granted to the borrower.

In order to improve the treatment of borrowers, the council also argued that the current oil price subsidy system should be strengthened and tax benefits such as employment registration tax and value-added tax reduction should be provided.

In addition, opinions were suggested that a system should be prepared so that shippers can directly carry out loading and unloading work and minimize waiting time in order to ensure traffic safety for trucks. The main opinion was that speeding or overloading crackdowns and punishments should be strengthened.

The Ministry of Land, Transport and Maritime Affairs plans to closely review the results of discussions by the consultative body and the opinions presented at public hearings to finalize a plan to normalize the freight transportation market.

For more details, please refer the below website of Seoul news paper.

Reference: Sung Gu Ok, " Discussion of ‘standard fare system’ instead of safe fare system… Improving Shipper Penalty Provisions", Seoul newspaper, Jan 18th, 2023


bottom of page