Korea’s LX Pantos, China’s Sinotrans agree to launch logistics JV

LX Pantos Co., the logistics unit of South Korea’s LX Group, said on Thursday it will launch a multimodal transport joint venture with Sinotrans Ltd., China’s top logistics firm, to take advantage of the rise in trade between the two countries.

The two companies signed a memorandum of understanding on the launch of the JV and the formation of a strategic partnership at Sinotrans’ headquarters in Beijing.

The signing ceremony was attended by LX Panto Chief Executive Lee Yong-ho, SinoTrans CEO Rong Song and other executives from the two companies.

Under the agreement, the two companies will work together to ship cargo from China to Korea by ship and forward the cargo to US and European destinations by air through Incheon International Airport.

Planned investment amounts from each side for the JV weren’t known.

Multimodal transport, also known as intermodal transport or combined transport, refers to the movement of goods using multiple modes of transportation such as by rail, road, sea and air.

LX Pantos said the collaboration is partly designed to address the increasing volume of goods from China, driven by the rapid growth in Chinese e-commerce transactions among Korean consumers.

In recent years, Chinese e-commerce giants such as AliExpress, Temu and Shein have increasingly attracted Korean consumers to their online platforms with cheaper products and sometimes faster deliveries than Korean rivals such as Coupang, Naver Corp., 11Street, SSG.COM and Gmarket.

According to Incheon International Airport Corp., the Korea-China multimodal transportation volume reached some 98,560 tons in 2023, up 43% from the previous year.

WIN-WIN DEAL

LX Pantos, Korea’s largest overseas freight forwarder and the cash cow of LX Group, has been aggressively expanding its logistics business.

The LX-Sinotrans partnership involves sharing the global logistics networks and the infrastructure of both companies.

LX Pantos boasts a global network of 380 business locations, offering various services, including transportation, storage and customs clearance.

Sinotrans has strengths in land transportation, including railway and trucking within the country and toward European countries.

Posting sales revenue of $16.4 billion in 2022, Sinotrans is China’s largest logistics firm with seaborne shipping volume alone reaching 3.89 million twenty-foot equivalent units (TEUs).

“Sinotrans is our trustworthy partner with a long history of cooperation,” said LX Pantos CEO Lee.

Sinotrans CEO Song said: “LX Pantos is the No. 1 air freight forwarder with a vast global logistics network. We expect to create synergy through the strengths of each company.”

Write to Jin-Won Kim at jin1@hankyung.com

In-Soo Nam edited this article.