Exclusive
Logen Logistics, Ahead of Merger with Cowell Fashion, Experiences Another IT System 'Blackout'

[비즈한국] Signs of an 'exodus' are emerging among Logen Logistics users. Service reliability has plummeted due to recurring system failures during the transition to a new IT system. In particular, a similar issue occurred during a rollout attempt last August, leading to the suspension of the implementation; given that the same problem has resurfaced three months later, concerns regarding Logen’s overall IT infrastructure and operational framework are intensifying.

Another failure in 3 months; self-employed business owners are fuming

On the 24th, chaos broke out among self-employed business owners running online operations. Logen Logistics' IT system went down, effectively making it impossible to ship packages. One business owner lamented, "There were over 5,000 people in the connection queue just to log in, and even when I managed to connect, the system froze. I waited from 9:00 AM and only managed to print shipping labels after 4:00 PM."

Logen had introduced a web-based next-generation system that day to replace its existing infrastructure. The operational policy shifted from installing separate software on PCs to print labels to accessing a website to issue them. This is the same method currently used by CJ Logistics000120.

The problem arose as users flooded the website simultaneously. Connection delays and site crashes followed, leading to a complete halt of core functions like label printing and parcel registration. Complaints flooded community forums for self-employed individuals, with comments like, "It's not connecting," "Label printing has been delayed for hours," and "We should file a class-action lawsuit."

Regarding the system error, Logen stated in a notice, "System connection and screen loading errors occurred due to network overload," adding, "Due to the nature of web-based systems, network overload impacts the loading of the entire program menu." The company added, "We are focusing on reducing the number of users in the connection queue, which is the main cause of the network overload, and the wait times are gradually decreasing."

The frustration among users is particularly high because the same problem has happened before. Logen attempted to switch to a new system in August as well, but a nationwide connection failure forced them to halt the transition entirely. At the time, Logen issued an apology and temporarily suspended the new system, stating that they would "carefully review the issues and announce a new re-opening schedule after thorough inspection."

However, with the same issue recurring in the new system after three months, critics are questioning the company’s internal technical capabilities and verification processes. Some users have indicated they can no longer trust Logen's system stability and are considering switching to other courier services. Logen responded briefly to inquiries about the failure, stating, "We understand it is currently operating normally."

A reckless system switch before the merger? Cowell says, "No operational exchanges currently"

Logen will be incorporated into Cowell Fashion033290's logistics and transportation division following a merger on December 1. Cowell Fashion announced its absorption merger of Logen in September. Cowell Fashion acquired a 100% stake in Logen in 2021 for approximately 340 billion KRW with the goal of strengthening its online channel competitiveness. Cowell Fashion cited "management efficiency" and "strengthening business competitiveness" as the purposes of the merger, stating, "We expect to create synergy after the merger with Logen."

Cowell Fashion is a core subsidiary of the Daemyung Chemical Group, which grew based on licenses for innerwear and sportswear from global brands like Calvin Klein, Emporio Armani, Adidas, and Puma. Last year, it spun off its fashion division to create a new entity, Pond Group, and has since reorganized its business structure around electronic components and logistics/transportation (Logen Logistics).

Industry insiders are paying attention to the fact that this system failure occurred just before the merger. Some speculate that problems may have arisen because Logen rushed to finalize the new system implementation before the merger. The interpretation is that since errors often occur immediately after a new system transition, the company likely wanted to complete the transition while the legal responsibility still rested solely with the Logen entity. Cowell Fashion denied this, stating, "We have no operational exchanges with Logen at present."

Currently, Logen Logistics accounts for a significant portion of Cowell Fashion. According to Cowell Fashion's performance for the first half of this year, the transportation division's revenue was 340.468 billion KRW, accounting for 88.7% of total sales. In effect, Cowell Fashion's performance is heavily dependent on Logen's results.

For this reason, experts point out that Logen’s system issues are inseparable from Cowell Fashion's financial performance. If system failures lead to customer churn or loss of trust from business partners due to delivery delays, Logen's revenue will inevitably suffer, which in turn could directly impact Cowell Fashion's bottom line.

A Cowell Fashion official explained, "Our offices are completely different from Logen's, and we are not working together, so we do not share internal systems or operational situations. We are only in the process of the legal merger, and we were not aware of this recent failure."