News / Suffering Korean SMEs offered discounted intermodal transport to Europe

KITA-LX Pantos agreement signing (KITA vice-chairman Lee Kwan-sup (left) with LX Pantos CEO Choi Won-hyok (right)

South Korean logistics group LX Pantos has signed an agreement with the Korea International Trade Association (KITA) to provide discounted container transport to help local garment exporters facing difficulties getting goods to Europe due to the Russia-Ukraine war.

The exporters would use cheaper sea freight to get the goods to Russia, and then rail the goods to Europe, but sea freight is no longer viable as many liner operators have suspended sailings to the sanctioned country.

Now, non-sanctioned goods are being transported via eastern Russia for the domestic market via the trans-Siberian railway, which is also being used for goods not sanctioned destined for western European and EU markets and being allowed to cross into Finland.

Pantos, part of the LG chaebol, has agreed to reserve 30 teu for these exporters every week, at a 10%-15% discount, to ship the goods to China, from where it can be railed to Europe, as agreed with KITA on 8 April.

Among South Korean logistics companies, Pantos boasts the largest connections to the Commonwealth of Independent States (CIS), providing intermodal services  for SMEs. It confirmed the trans-Siberian and trans-China railways were still operating normally, and has secured exclusive supply rights from PJSC TransContainer, Russia’s largest railway logistics company.

PJSC operates its sea-rail service from Fuzhou and Lanzhou, however, The Loadstar understands a new service out of Taicang and Ningbo, via sea to Vostochniy, is expected to start next month.

“Compared to sea, rail transport has the advantage of shorter transit times between Asia and Eastern Europe, and higher punctuality,” said Pantos.

In 2021, Pantos, which claims to be the largest freight forwarder in South Korea, handled 1.65m teu of seaborne containers, the most since its establishment in 1977, and net profit more than doubled from 2020, to $225.2m, on strong demand for container shipping.

KITA’s head of logistics service, Lee Joon-bong, said: “I hope this support will solve the difficulties SMEs face in exporting their goods to Europe and will serve as an opportunity to further revitalise the atmosphere of win-win growth between the domestic logistics and trading industries.”