Volume

A Comparative Study of Korean and Japanese 29 Number

Logistics 3 December
Industries 2013 Structures
Market pp. 361-376

A Comparative Study of Korean and Japanese

Logistics Industries Market Structures : Focusing
on Subsidiary and Third-Party Logistics
Companies
Woo-chul AHN * Shinichi ISHII ** Seung-bum AHN ***

Contents
IV. An Analysis of the Market
I. Introduction
Concentration Index
II. Literature Review
V. A Performance Analysis of Subsidiary
and Third-Party Logistics Companies
III. Logistics Industry in Korea and
Japan
VI. Conclusion

Abstract

The logistics industries of Korea and Japan have very similar growth
patterns. In this study, we aimed to determine how market structures are
changing in Korea and Japan for the past 10 years. We divided logistics market
structures into logistics subsidiaries (2PL) and 3PL companies, and we
analyzed whether performances such as turnover, profit, or their growth rate
between the 2PL and 3PL markets are significantly different. Koreas market
concentration ratio for the logistics industry indicates the rapid turn to a
competitive, low-concentration market structure, whereas the comparable
market structure in Japan has already entered a perfectly competitive market.
The results show that rapid expansion in a subsidiary logistics market depends
on a captive market that does not affect 3PL market size and profitability. In
fact, that rapid expansion directly reduces the growth in the Korean or
Japanese 3PL markets.
Key Words : Subsidiary, Third-Party Logistics, Logistics Industry, Market
Structure, Two-way ANOVA

Copyright 2013, The Korean Association of Shipping and Logistics, Inc. Production and hosting by Elsevier B.V.
All rights Reserved. Peer review under responsibility of the Korean Association of Shipping and Logistics, Inc.
* Assistant Professor, University of Sungkyul, Korea, Email : ahnwc75@sungkyul.ac.kr
** Senior Consultant, Nomura Research Institute, Japan, Email : s-ishii@nri.co.jp
*** Professor, University of Incheon, Korea, Email : sbahn@incheon.ac.kr, Corresponding author

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 A Comparative Study of Korean and Japanese Logistics Industries Market Structures

I. Introduction

The logistics industry in Korea has rapidly grown over the past ten years.
Multinational, major manufacturing and wholesale companies have
concentrated on the internal and external efficiency and effectiveness of
supply chains in an effort to reduce logistics costs. To that end, some
companies have established their own logistics companies: second-party
logistics(2PL) companies(also known as subsidiaries) owned through
mergers and acquisitions in the logistics industry. However, some experts
and researchers have suggested that this trend might weaken the
competitiveness of existing third-party logistics(3PL) companies,
eventually leading to monopolistic and oligopolistic structures in the
logistics markets. This is especially relevant for 3PL companies in Korea.
Some researchers have suggested that big business groups have two
reasons to prefer setting up their own 2PL companies when entering the
logistics market rather than using 3PL companies. These reasons are the
1)
conflict of interest hypothesis and efficient transactions hypothesis .
Ghemawat and Khanna (1998) proposed similar views, asserting that the
subsidiaries of business groups replace poorly performing or nonexistent
third-party companies in markets that developed countries take for granted.
Others offer tangible empirical results in their research, which are
2)
consistent with these arguments . Results from these studies suggest that
business groups could offer efficient forms of governance in some
circumstances, showing that subsidiary tended to exhibit higher
3)
profitability than independent firms do in developed countries.
Logistics industries in Korea and Japan have very similar market growth
patterns. And they both have only 2PL and 3PL markets all around the
world. In this study, we aimed to determine how market structures are
changing in Korea and Japan. We divided market structures into 2PL and
3PL companies and analyzed whether performances such as turnover,
profit, or their growth rate are significantly different between 2PL and 3PL
markets.

II. Literature Review

In this study, we linked the relationship between 2PL and 3PL markets
with the existing literature on relationships between subsidiary markets of
large companies and the markets of competing independent firms.

1) Chang and Choi(1988), p.142.

2) Chang and Choi(1988); Ghemawat and Khanna(1998)
3) Chang and Hong(2000), p.429.

362
 A Comparative Study of Korean and Japanese Logistics Industries Market Structures

Empirical studies present mixed findings about economic development

4)
when a large company operates through subsidiary firms.
One of the preferred logistics sourcing strategies is to take logistics as a
function within a company, a so-called in-sourcing strategy. However,
more and more companies today, especially those in Europe and North
America, are outsourcing their logistics to 3PL companies in a so-called
outsourcing strategy. A hybrid model between the above two strategies is
also possible. A company can purchase a previously 3PL company to make
5)
it a subsidiary firm.
Chang and Choi (1988) used the transaction cost approach to analyze the
diversification strategies of companies in Korea and showed that affiliated
companies have higher profits and greater efficiency than do non-affiliated
companies in Korea. Perotti and Gelfer (2001) also found that subsidiary
firmshave higher values of Tobins q (otherwise comparable) than
independent firms do in Russia. However, when considering structural
differences in their regression analysis, Perotti and Gelfer (2001) could not
find significant differences in profits between affiliated and non-affiliated
companies. In the Caves and Uekusa (1976) study of Japanese business
groups, the authors found that companies affiliated with business groups
had lower profits than did non-affiliated companies.
Using panel data from 1988 to 1990 on Chinas business groups,
Keister(1998) found that the presence and predominance of interlocking
directorates and finance companies in business groups improved the
financial performance and productivity of member firms, and more
centralized groups performed better than others did. In a half of the ten
emerging economies in their sample (e.g., Brazil, India, Korea, Taiwan,
and Thailand), the inter-temporal variance of firm profitability, measured
by the ratio of operating returns to assets, was lower for group affiliates
6)
than for non-group affiliates. A few studies have dealt with the logistics
industrys market structure in Korea, and recent studies have addressed
this Korean market structure in terms of shipping, suggesting the use of a
concentration ratio (CR) index or a Herfindahl-Hirschman index (HHI) of
7)
its market.

III. Logistics Industry in Korea and Japan

The importance of logistics has increased and subsidiaries of major

4) Caves and Uekusa(1976); Chang and Choi(1988); Khanna and Palepu(2000); Leff(1978)
5) Liwen(2007), p.13.
6) Chang and Choi(1988), p.152; Yiu et al.(2005)
7) Choo and Ahn(2009); Han(2003); Kim and Bahn(2009); Park(2001); Ha and Seo(2013)

363
 A Comparative Study of Korean and Japanese Logistics Industries Market Structures

shippers have dominated the logistics industry market in Korea, extending

the scope of scale and services. Major shippers focus on allocating
resources to core competitiveness as logistics outsourcing, and this raises
the competitive productivity of 2PL firms to concentrate the limited
resources in house.
Logistics subsidiaries usually have a greatly increased compound annual
growth rate (CAGR) in their turnover. Key logistics subsidiaries such as
Glovis, Pantos, and Samsung-Logitech have grown rapidly for the past
decade, with approximately 15-40% CAGR, whereas the key 3PL
companies, such as Korea Express and Hanjin, have increased steadily
with an approximately 8% CAGR, which is relatively low when compared
to the subsidiaries (Table 1).

<Table 1> Turnover growth of major logistics companies in Korea

Unit: 100 million won
Category 2001 2005 2009 2010 CAGR
Glovis(Hyundai-Kia
Motors) 15,408 31,928 58,340 41.0%

Pantos(LG
Subsidiary 1,867 10,009 11,346 14,576 16.7%
Electronics)
Samsung-Logitech
(Samsung Electronics) 1,621 8,256 11,012 14,667 26.3%

Korea Express
9,597 11,717 18,317 20,977 8.6%
3PL
Hanjin
6,061 7,427 9,032 10,847 8.0%
Source: Annual report of each company

We adopted a Pearson correlation analysis in this study to compare

logistics subsidiaries (affiliate firms) with parent companies because the
8)
method is widely used in the previous studies . Table 2 shows the
correlations between the parent companies and their logistics subsidiaries.
When an internal transaction ratio is over 0.7, the two companies are
highly correlated. Therefore, we can infer that logistics subsidiaries
depend on parent companies in big business groups from the results.

8) Caves and Uekusa(1976); Chang and Choi(1988); Khanna and Palepu(2000); Perotti and Gelfer(2001)

364
 A Comparative Study of Korean and Japanese Logistics Industries Market Structures

<Table 2> Pearson correlation analysis for subsidiaries and parent companies by
turnover in Korea
Internal transaction
Parent company Logistics subsidiary Pearson correlations
ratio by turnover
Samsung Electronics Samsung-Logitech 0.957** 100%
Hyundai Motors 0.974** 100%
GLOVIS
Kia Motors 0.942** 100%
LG Hi Business Logistics 0.889** 92.15%
CJ CJ GLS 0.873** 31.42%
Lotte LotteLogistics 0.919** 90-95%
Dongkuk Steel Intergis 0.712* 46.55%
Hyosung Hyosung Trans World 0.973** 100%
SeA Steel SeALogis 0.747* 100%
* Correlation is significant at the *p<0.05, **p<0.01 level.

In the late 1980s, a boom in logistics subsidiaries in Japan occurred to

prevent the outflow of logistics costs, to improve efficiency, and to create
profit from the industrialization of logistics functions. Consequently,
approximately 800 companies in Japan had logistics subsidiaries by the end of
9)
the 1980s, and their turnover amounted to 3-4 trillion yen in 2007.
In Japan, most manufacturers have faced various difficulties through the
long economic depression in the late 1990s, and logistics subsidiaries had
to change their strategies. From 2004 to 2010, some parent companies
disposed of their logistics subsidiaries (e.g., IBM Logistics, Seto
Transportation, and Fujitsu Logistics), while others consolidated their
logistics subsidiaries (e.g., Mitsu Chemicals Logistics, IHI Logistics, and
Yamaha Logistics). Consequently, most logistics subsidiaries in Japan
diminished from 2004 to 2010, due to a business rationalization to
strengthen the logistical professionalism of staff internal to the parent
10)
company.
As of 2010, logistics subsidiaries comprise approximately 150 of the 500
logistics companies in Japan, and most of the top-ranked 100 firms are
11)
from subsidiaries by turnover. We adopted a Pearson correlation analysis
for parent companies such as Toshiba, Sanyo, Toyota, Hitachi, and Sony
and their logistics subsidiaries during 2007 to 2010 by turnover, similar to
our previous Korean case. In Table 4, two of the firms are not highly
correlated (less than 0.8), with a 3PL ratio of total revenues below 50%.
Therefore, we inferred that logistics subsidiaries are not dependent on
parent companies in Japan.

9) Japan Institute of Logistics System(2010), p.16.

10) Logi-Biz(2011)
11) Logi-Biz(2011)

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 A Comparative Study of Korean and Japanese Logistics Industries Market Structures

<Table3> Correlation of the indicators for subsidiaries and parent companies by

turnover in Japan
3PL ratio of total
Parent company Logistics subsidiary Pearson correlations
revenue
Hitachi Group Hitachi Logistics 0.963** 70%
Sanyo Electronic
Sanyo Electronic 0.608 60%
Logistics
Alps Electronic Alps Logistics 0.099 59%
JFE Steal JFE Logistics 0.848* 44%
Kewpie Distribution
Kewpie 0.889* 80%
Service
Toyota Motors Toyota Transportation 0.670** 35%
* Correlation is significant at the *p<0.05, **p<0.01 level (two-tailed)
Source: Logi-Biz each year

IV. An Analysis of the Market Concentration Index

The concentration of firms in an industry is of interest to economists,

business strategists, and government agencies. Here, we discuss the two
commonly used methods of measuring industry concentration: the CR and
12)
the HHI. The CRm is the percentage of market shares owned by the
largest m firms in an industry, where m is a specified number of firms,
often three, but sometimes a larger or smaller number. If the CR3 were
close to zero, this value would indicate an extremely competitive industry,
since the four largest firms would not have any significant market share. If
the CR3 measure is more than approximately 75, the market is effectively
an oligopoly. The HHI measures company size relative to the industry and
is an indicator of the amount of competition among the companies in that
industry. The major benefit of the HHI as a concentration ratio in relation
to such measures is that it gives more weight to larger firms. An HHI
below 0.01 (or 100) indicates a highly competitive index. An HHI below
0.15 (or 1,500) indicates a low concentration on the index. An HHI
between 0.15 and 0.25 (or 1,500-2,500) indicates a moderate concentration,
and an HHI above 0.25 (above 2,500) indicates a high concentration
(Table 4).

12) U.S. Department of Justice and the Federal Trade Commission(2010), p.18.; Quick
MBA(http://www.quickmba.com/econ/micro/indcon.html)

366
 A Comparative Study of Korean and Japanese Logistics Industries Market Structures

<Table 4> Index of market concentration in the logistics industry of Korea

Category 2001 2005 2009 2010
CR3 50.10% 35.50% 29.60% 31.80%
Total
HHI 945.5 557.74 443.98 494.69
Shipping/Port CR3 74.8% 54.5% 48.4% 59.5%
Operation HHI 2,268 1,217 1,056 1,333
Land CR3 55.2% 44.1% 42.0% 40.7%
Transportation HHI 1,360 935 914 847
Air CR1 71.8% 71.0% 69.2% 67.2%
Transportation HHI 5,936 5,872 5,614 5,396
CR3 28.5% 36.2% 36.5% 43.3%
Warehousing
HHI 452 669 636 975

The results on Table 4 show that the logistics industrys structure in

Korea rapidly turned into a competitive market with a low concentration
ratio. The market structure of shipping/port operation has turned an
oligopolistic market in 2001 into a moderately concentrated market in
2010. Land transportation gradually changed from a moderately
concentrated market in 2001 to a low-concentration market in 2010. In
addition, warehousing turned from a low-concentration market in 2001 to
a moderately concentrated market in 2010 and air transportation kept a
monopolistic market to 2010. These results indicate that the logistics
industry in Korea is gradually changing from an oligopolistic market to a
competitive market, as evident in the growth of new 3PL companies and
the lower entry barrier to logistics market by external environmental
factors or support government policies. The concentrate rate indices show
different trends by sub-industries. Shipping/port operation and land
transportation have gradually decentralized, whereas warehousing has had
a tendency to centralize. Therefore, we can infer that the growth of the
logistics subsidiaries market has led to a centralized market with a
concentrated rate.
In Japan, the market structure of the logistics industry has already
entered a perfectly competitive market as of the 2000s. Like all other
sub-industry, the logistics industry in Japan has turned into a
low-concentrated market, except for the specific cargo sub-industry (Table
5). Although the market size of the logistics industry in Japan has
increased by approximately 25% from 2001 to 2009, a specific limit
defines a low-concentration market, which means that the logistics market
13)
concentration did not yield to an economies of scale.

13) Shin et al.(2011), p.22.

367
 A Comparative Study of Korean and Japanese Logistics Industries Market Structures

<Table 5> Index of market concentration in the logistics industry of Japan

Category 2001 2006 2007 2008 2009
CR3 20.7% 21.7% 22.5% 22.5% 21.9%
Total
HHI 232 233 235 237 231
CR3 33.4% 26.9% 33.9% 35.0% 34.0%
General Cargo
HHI 551 449 462 486 461
CR3 24.4% 28.9% 26.8% 26.4% 26.3%
Warehousing
HHI 452 563 520 483 467
NVOCC or CR1 31.1% 37.9% 35.7% 31.9% 32.8%
Non-Asset HHI 586 732 657 547 597
Shipping/Port CR3 38.0% 37.3% 39.2% 40.3% 39.9%
Operation HHI 689 662 729 766 745
CR3 46.5% 83.0% 85.4% 84.5% 79.7%
Specific Cargo
HHI 1155 5282 5464 5443 4866
Others(Agent, CR3 23.8% 21.0% 21.2% 19.8% 20.8%
etc.) HHI 487 390 374 354 389

V. A Performance Analysis of Subsidiary and

Third-Party Logistics Companies

1. Hypotheses, Methodology and Data Collection

Assuming that turnover and profit are different for 2PL and 3PL com
panies, and that the growth of turnover and profit in the 2PL market w
eakens the 3PL market, we developed the four following null hypotheses
to test:
H1) 2PL and 3PL companies have no difference in turnover.
H2) 2PL and 3PL companies have no difference in the turnover
growth rate.
H3) 2PL and 3PL companies have no difference in profit.
H4) 2PL and 3PL companies have no difference in the profit gro
wth rate.

We used a two-way ANOVA statistical test to determine difference

s and possible interactions, as variables have two or more categories.
An interaction effect is a change in the simple main effect of one v
ariable over levels of the second, and this study applied two-way A
NOVA to test differences between two markets performances.
This study made an analysis of market structure of logistics industr
y in Korea to classify into land transport, water transport, air transp
ort, service for warehousing and transportation by 9th standard indu

368
 A Comparative Study of Korean and Japanese Logistics Industries Market Structures

strial classification provided by the Korea Chamber of Commerce a

nd Industry (2012). Most 2PL companies outperform their 3PL comp
etitors, achieving higher ranking in the marketplace due to the suppo
rt of parent companies. For this study, we selected the top 50 logisti
cs companies in Korea, dividing them among 2PL and 3PL firms. E
ven though there is no official standard by which to classify a 2PL
and 3PL company, we followed the dart analysis, retrieval, and trans
fer (DART) system. According to that system, when a logistics com
pany has a parent company and a turnover greater than 20%, that c
ompany is treated as a subsidiary. Furthermore, we referred to news
paper articles and annual company reports from the logistics compan
ies under study to classify them.
Furthermore, in this study, we analyzed whether turnover, profit, or
growth rate between the two markets are significantly different in Ja
pan, using data from the top 500 domestic logistics companies, base
d on the annual publication by Logi-Biz. We also analyzed data for
seven years (2001-2009, 2003 and 2005 excepted) as limitation of
collecting data.
The logistics industry in Japan can be classified into general cargo, sh
ipping/port operation, warehousing, non-assets, specific cargo, and freight
forwarder (e.g., agents, brokers, and packing) sub-industries, courtesy of
Logi-Bizs annual reports. When we analyzed turnover in the top 500 d
omestic logistics companies, the market type seems complicated. In this
regard, we selected the top 300 logistics companies as substitutes for th
e entire logistics industry in Japan to the limitations of data. Affiliates wit
h parent companies and non-affiliates could be the most important distin
ction for the logistics market. Therefore, we classified 2PL and 3PL co
mpanies in Japan, based on logistics expert who was in Nomura Research
Institute.
Finally, this study used turnover and its growth rate to analyze H
1 and H2, and we used profit and its growth rate over the past yea
r to analyze H3 and H4 as input data.

2. Korea Case

A two-way ANOVA procedure (SPSS, version 18.0) was used to test

differences in performance (turnover, profit, or growth rate) between the
2PL and 3PL markets This procedure showed a main effect of year (time),
F(9,480)=1.589, p D PDLQ HIIHFW RI PDUNHW W\SH ) 
pLQGLFDWLQJWKDWWKHUHZHUHGLIIHUHQFHVEHWZHHQWXUQRYHUVVFDOHRI
market) of the two markets when year (p=0.116) and market type
(p=0.393). However, there was an interaction between year and market

369
 A Comparative Study of Korean and Japanese Logistics Industries Market Structures

type, F(9,480)=0.037, 

p 7DEOH  7KLV LQWHUDFWLRQ HIIHFW WHVW
(p=1.000) showed that there was no difference in turnover between 2PL
and 3PL markets in Korea. Therefore, null hypothesis H1 is supported,
indicating that 2PL market turnover may not have directly affected 3PL
market turnover. Likewise, H1 is supported in the shipping/port operation
and land transportation, warehousing sub-industries.
In the Korean logistics industry, there was an interaction between year
and market type, F(8,415)=0.867, p7DEOH7KLVLQWHUDFWLRQHIIHFW
test (p=0.544) showed that there was no difference between the growth
rate of turnover between 2PL and 3PL markets. Therefore, null hypothesis
H2 is supported, indicating that the growth rate of turnover in the 2PL
market may not have affected the growth rate of turnover in the 3PL
market. However, H2 is rejected indicating that the growth rate of turnover
in the 2PL market may have affected in 3PL market in the land
transportation sub-industry. Likewise,H2 is supported in the shipping/port
operation and warehousing sub-industries.
There was also an interaction between year and market type,
F(9,480)=0.600, p 7DEOH  7KLV LQWHUDFWLRQ HIIHFW WHVW S 
showed that there was a difference in profit between 2PL and 3PL markets.
Therefore, null hypothesis H3 is supported, indicating that the profit of the
2PL market may not have directly affected the profit in the 3PL market.
Likewise, H3 is supported in the shipping/port operation and land
transportation, warehousing sub-industries.
There was an interaction between year and market type, F(8,415)=1.090,
p7DEOH7KLVLQWHUDFWLRQHIIHFWWHVWS VKRZHGWKDWWKHUH
was a difference in the profit growth rate in 2PL and 3PL markets.
Therefore, null hypothesis H4 is supported, indicating that the growth rate
of 2PL market profit may have not affected the growth of profit in the 3PL
market. Likewise, H4 is supported in the land transportation and
shipping/port operation sub-industries. However, null hypothesis H4 is
rejected in the warehousing sub-industry.

3. Japan Case

A two-way ANOVA was used to test the logistics industry in Japan,

showing an effect of year, F(6,2086)=0.335,
p 7KLV LQGLFDWHG WKDW
there were no differences in turnover between the two markets (p=0.918).
However, market type, F(1,2086)=3.495, p , indicates that there were
differences in turnover between the two markets (p=0.062). Furthermore,
there was an interaction between year and market type, F(6,2086)=0.421,
p7DEOH7KLVLQWHUDFWLRQHIIHFWWHVWS VKRZHGWKDWWKHUH
was no difference in turnover between the 2PL and 3PL markets.
370
 A Comparative Study of Korean and Japanese Logistics Industries Market Structures

Therefore, H1 is supported, indicating that 2PL market turnover may not

have directly affected turnover in the 3PL market. Likewise, null
hypothesis H1 is supported in the general cargo, warehousing, NVOCC,
non-asset, specific cargo, shipping/port operation, land transportation,
and others (e.g., packing, broker, agent) sub-industries.
In the case of the turnover growth rate, there was an interaction between
year and market type, F(5,1546)=1.811, p 7DEOH  7KLV
interaction effect test (p=0.108) showed that there was no difference in
turnover growth rate between 2PL and 3PL markets. Therefore, null
hypothesis H2 is supported, indicating that the turnover growth rate in the
2PL market may not have affected the turnover growth rate in the 3PL
market. Likewise, null hypothesis H2 is supported in most sub-industries,
save general cargo, NVOCC, non-asset, shipping/port operation,
specific cargo. However, null hypothesis H2 is rejected in
warehousing, Others (packing, broker, agent) sub-industry.
There was an interaction between year and market type, F(6,656)=0.178,
p7DEOH7KLVLQWHUDFWLRQHIIHFWWHVWS VKRZHGWKDWWKHUH
was no difference in profit between 2PL and 3PL markets. Therefore, null
hypothesis H3 is supported, indicating that 2PL market profits may not
have directly affected profits in the 3PL market. As evident in Table 13,
there was also an interaction between year and market type,
F(5,370)=0.891, p7KLVLQWHUDFWLRQHIIHFWWHVWS VKRZHGWKDW
there was no difference in the profit growth rate between 2PL and 3PL
markets. Therefore, null hypothesis H4 is supported, indicating that the
profit growth rate in the 2PL market may not have affected the growth rate
of profits in the 3PL market.

VI. Conclusion
The logistics industry market size in Korea has rapidly grown for the
past 10 years and our analysis of the market concentration index indicated
that the market structure has rapidly turned into a competitive,
low-concentration market. However, the warehousing aspect of large 2PL
companies tended toward a continuously higher concentration when
compared with the other sub-industries. Thus, despite an increase in
market size, warehousing, and its high market concentration, is likely to be
monopolistic, with the consequent problems of large subsidiary
companies.
Conversely, the market structure of the logistics industry in Japan has
already entered a perfectly competitive marketplace as of the 2000s
without major changes. Like all other sub-sectors in the Japanese market,
371
 A Comparative Study of Korean and Japanese Logistics Industries Market Structures

the logistics industry has turned into a low-concentration market, with the
exception of its specific cargo sub-industry. Nevertheless, the results of
this study show that a recent change in the Japanese logistics subsidiary
market will stimulate the growth of other 3PL companies. Thus, a
gradually higher market concentration is likely in the future.
In this study, we mainly aimed to test differences in performance
(turnover, profit, or growth rate) between 2PL and 3PL markets since 2001,
focusing on the top 50 logistics companies by sub-industry. Our results
indicate that turnover/profit (size of market) in the 2PL market may not
have directly affected turnover/profit in the Korean 3PL market.
Conversely, a turnover/profit growth rate in the 2PL market may have
directly or indirectly affected the growth rate of turnover/profit in the
Korean 3PL market in the warehousing, land transportation sub-industry.
Hence, an expansion in the 2PL market greatly depends on the captive
market, and it has not caused a reduction in the 3PL market size, even
while it caused a reduction in the 3PL market growth. Although our results
for Japan were similar to those for Korea, a recent change in the
2PLmarket in Japan is likely to stimulate growth in the Japanese 3PL
market size.
We analyzed the Korean and Japanese logistics industries market
structures since 2001, and our study, using a two-way ANOVA to test
inter-market competition, differs from previous studies dealing with the
performance between these two markets. Contrary to our expectations, the
results indicated that the rapid expansion in the 2PL market, which is
highly dependent on the captive market, has not affected the 3PL market
size and profitability, even while it has affected a reduction in the 3PL
markets growth rate some parts of business in the two countries.

Acknowledgment

This work was supported by a grant from Incheon National University in 2013.

Date of Contribution ; September 25, 2013

Date of Acceptance ; December 1, 2013

372
 A Comparative Study of Korean and Japanese Logistics Industries Market Structures

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 A Comparative Study of Korean and Japanese Logistics Industries Market Structures

Appendix

<Table 6> Test of interaction between market and year by turnover in Korea
Null
Turnover DF MS F p-value
Hypothesis
Korea Logistics Industry 9 6660233 .037 1.000 support
Shipping/Port Operation 9 9283317 .051 1.000 support
Land Transportation 9 2056771 .322 .968 support
Warehousing 9 23893437 1.709 .084 Support

<Table 7> Test of interaction between market and year by growth rate of turnover in Korea
Null
Growth Rate of Turnover DF MS F p-value
Hypothesis
Korea Logistics Industry 8 1.127 .867 .544 Support
Shipping/Port Operation 8 .308 .467 .879 support
Land Transportation 8 7.630 2.675 .007 reject
Warehousing 8 1.067 .423 .907 support

<Table 8> Test of interaction between market and year by profit in Korea
Null
Profit DF MS F p-value
Hypothesis
Korean Logistics Industry 9 641,431 .600 .797 support
Shipping/Port Operation 9 244,079 .227 .991 support
Land Transportation 9 2849.305 .211 .993 support
Warehousing 9 22224.701 .864 .557 support

<Table 9> Test of interaction between market and year by growth rate of profit in Korea
Null
Growth Rate of Profit DF MS F p-value
Hypothesis
Korean Logistics Industry 8 137.411 1.090 .369 Support
Shipping/Port Operation 8 35.488 .439 .897 support
Land Transportation 8 4.005 .881 .532 Support
Warehousing 8 139.794 2.285 .021 reject

<Table 10> Test of interaction between market and year by turnover in Japan
Null
Turnover DF MS F p-value
Hypothesis
Japan Logistics Industry 6 5412512149.830 .421 .866 Support
General Cargo 6 2289464290.085 .125 .993 Support
Warehousing 6 50554070.306 .068 .999 Support
NVOCC, Non-Asset 6 2915811231.852 1.229 .293 Support
Shipping/Port Operation 6 12259271.416 .010 1.000 Support

375
 A Comparative Study of Korean and Japanese Logistics Industries Market Structures

Specific Cargo 6 34989816682.818 .644 .695 Support

Others(Packing, Broker,
6 30724529.228 .206 .975 Support
Agent)

<Table 11> Test of interaction between market and year by growth rate of turnover in Japan
Null
Growth Rate of Turnover DF MS F p-value
Hypothesis
Japan Logistics Industry 5 .273 1.811 .108 Support
General Cargo 5 .264 1.028 .400 Support
Warehousing 5 .109 4.132 .001 reject
NVOCC, Non-Asset 5 .052 .937 .459 Support
Shipping/Port Operation 5 .003 .194 .965 Support
Specific Cargo 5 .021 .781 .567 Support
Others(Packing, Broker, Agent) 5 .170 3.509 .005 reject

<Table 12> Test of interaction between market and year by profit in Japan
Null
Growth Rate of Turnover DF MS F p-value
Hypothesis
Japan Logistics Industry 6 2108565.184 .178 .983 Support

<Table 13> Test of interaction between market and year by growth rate of profit in Japan
Null
Growth Rate of Turnover DF MS F p-value
Hypothesis
Japan Logistics Industry 5 6.271 .891 .487 Support

376