The excellent shipper certification system, launched in 2020 to support domestic shipping companies, is showing disappointing results. Industry experts are now calling for policy reforms to improve its effectiveness and encourage greater participation.
Decline in Tax Deduction Benefits
Despite record-high cargo volumes in 2023, tax deductions through the system dropped by 71% compared to the previous year.
The benefit had peaked at 3.6 billion won in 2022, but fell to 2.4 billion won in 2023. This sharp decline reflects underutilization, despite shippers being eligible to deduct 1% of domestic shipping expenses and 3% of the increased amount from the previous year.
High Thresholds Limit Participation
Shippers are required to spend over 40% of maritime transport costs with domestic carriers and increase that percentage annually — a condition many find difficult to meet. As a result, the domestic shipping company acquisition rate has declined from 30% in 2020 to 26% in 2023, far behind Japan and Taiwan’s 60% rates.
Industry Demands Reforms
Industry stakeholders are urging the government to:
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Lower the expenditure ratio requirement
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Remove the annual increase condition
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Exclude unsupported routes from calculations
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Base criteria on cargo volume instead of expenses
Experts like Professor Kim In-hyun argue that the system’s current structure has high entry barriers and limited incentives, calling for a more flexible and realistic approach.
The excellent shipper certification system, though well-intentioned, has struggled due to rigid conditions. Without significant policy adjustments, its goal of strengthening domestic shipping companies may remain out of reach. A more inclusive and adaptive framework could help drive higher participation and meaningful industry support.
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Source: CHOSUN BIZ
