Excessive competition leads to low freight prices

The comparative low freight prices in the Korean trucking market are the result of excessive competition in the wake of trucking over-supply, a Korea Foreign Trade Association report proclaimed.
The KFTA asserted in press lease named ?he present position of trucks?that Korea has had an over-supply of trucks given the level of cargoes, causing excessive competition among truckers. The association revealed that cargo trucks increased by 54.6% to 272,000 units at the end of 2001 from 176,000 in 1997, while trucking cargoes increased by 7.3% to 535.72 million tons from 499.08 million tons during the same period.
The association stressed that the inequality of supply and demand forced freight prices downward. Though the truckers require higher fares, it would be decided by the market as the shippers choose comparatively cheap mid- and small- truckers, said the association.
The association expressed its view that it is most important to balance between supply and demand for sound growth. It will be more helpful to aid truckers losing their competitiveness into other areas rather than to restrict the market to registered trucks only.