[비즈한국] Controversy is mounting over the subcontracting structure of dawn delivery services under CJ Logistics000120. A transport company entrusted with SSG.com shipments by CJ Logistics has suddenly ceased operations without paying shipping fees to delivery drivers. Voices among the drivers in the field are calling for CJ Logistics to take responsibility for managing its partner companies.
Subcontractor falls behind on shipping fees starting from February, drivers point to "CJ's management responsibility"
Recently, Company A, a subcontractor that had been operating SSG.com dawn delivery shipments entrusted by CJ Logistics, stopped service operations due to worsening management. This company was responsible for deliveries in Seoul's Dongjak, Seodaemun, and Jongno districts, as well as the Ilsan and Paju areas of Gyeonggi Province.
In a public notice, Company A stated the reason for the business termination: "We have been proactively operating the service with expectations for the growth potential of the 'CJ One' service, but due to the absence of a sustainable business structure, unbearable losses, and worsened management, we are in a situation where stable operations are no longer possible." The delivery volumes handled by the company have now been transferred to other transport companies.
The problem is that the company failed to pay the drivers' shipping fees. Company A had been delaying payments to drivers since February. The February fees, originally scheduled for payment on March 20, were not paid, and payments for March and early April for some drivers have also been continuously delayed. While the company stated that it would pay the February fees by April 10 and the subsequent ones by April 20, it is reported that they have yet to fulfill these promises.
Anxiety is rising among the drivers in the field. One driver lamented, "The payment date has passed, but we can't even get in touch with the representative of the transport company. The unpaid amount since February is around 9 million won. Some drivers haven't received over 10 million won." Another driver appealed, "It's uncertain whether we will even be able to receive our unpaid fees. I don't know where to turn for help, or if I should file a lawsuit, and it feels hopeless."
Some are raising issues surrounding CJ Logistics' management system for partner companies. Although CJ Logistics has a contract with Company B that prohibits sub-subcontracting, it appears that a sub-subcontracting structure was effectively formed in the field as Company B passed the volume to Company A. It is reported that CJ Logistics was unaware of this fact until the situation surfaced.
One delivery driver pointed out, "CJ Logistics employees are stationed at the site, but it's hard to feel what specific role they play. As the primary contractor, don't they have a responsibility to manage the partner company's overall management and operations?"
A CJ Logistics official explained, "Payment for the dawn delivery shipments has already been made to the entrusted company. Making the same payment again could raise issues regarding breach of trust and legal complications, making it practically difficult." The official added, "Although the contract with the partner company has now been terminated, we plan to prepare support measures, such as legal advice, to assist drivers in the process of filing lawsuits or pursuing debt collection to resolve the non-payment issue."
Regarding the poor management of sub-subcontracting, they added, "There are cases where temporary rental vehicles are used due to fluctuations in volume, so there are limitations to identifying each case of sub-subcontracting and controlling it at all times. If we look too deeply into the overall operations of partner companies, there is a risk of managerial interference, so it is realistically difficult to manage all operational processes in advance."
Accumulated deficits hit a limit... departures of SSG delivery transport companies repeat
The industry points out that the dawn delivery subcontracting structure institutionalizes deficits for transport companies. Currently, SSG.com dawn delivery is operated by CJ Logistics winning the contract and then re-entrusting it to transport companies by region. While CJ Logistics explains that this is an efficient logistics operation structure, the accumulation of fees and costs during the re-entrustment process lowers the unit price received by the actual drivers.
The intensity of work for dawn delivery is considered high compared to the low unit price. Because drivers are pressed by deadlines and usually have to finish deliveries within 4 hours, they have to work without breaks, imposing a heavy physical burden. One delivery driver stated, "I do both daytime and dawn deliveries, but the unit price for dawn delivery is lower than daytime delivery. It's a nonsensical structure." They added, "Since drivers know this structure, no one wants to do dawn delivery. Even existing drivers are quitting. It is a very difficult situation to find drivers."
When there are difficulties in recruiting drivers, transport companies eventually have no choice but to rely on rental vehicles. However, the cost of rental vehicles is more than 1.5 times higher than that of regular drivers. As more rental vehicles are deployed to handle delivery volumes, the cost burden increases sharply, resulting in a structure where it is difficult for transport companies to remain profitable.
An industry insider explained, "Most transport companies jump into the business thinking they can secure drivers, but in reality, it is not easy to maintain the workforce. Eventually, cases of companies failing to bear the losses after continuing operations with rental vehicles are repeating."
Drivers in the field argue that there is a problem with the current subcontracting structure. One driver noted, "The transport company in charge of my delivery area has changed three times. Cases of businesses folding due to accumulated deficits are repeating. At first, there were many transport companies handling SSG.com deliveries, but now only a few remain hanging on. I don't know how long this state will last. Unless structural problems are improved, the situation will be difficult to change."
Regarding this, a CJ Logistics official said, "There may have been some operational instability in the early stages, but the situation is different now. It is operating stably," and added, "We are continuously taking measures to ensure that drivers can continue their existing work even if partner companies are changed."