How to Start a Small 3PL Business in Korea: Practical Strategies & Market Insights

※ This content is a summarized excerpt from a broadcast by Dr. Seong-Gu Yoon, CEO of SGY Company and logistics expert. For accurate details, please watch the full broadcast.

Hello to all LogiBridge subscribers.I’m always grateful to be back here. Though I often get some criticism when I appear on the show, I sincerely appreciate the LogiBridge team for inviting me again.

Today, instead of talking about parcel delivery, I’d like to revisit a topic that received a lot of interest in a previous episode: 3PL (Third-Party Logistics). More specifically, I’ll be sharing practical insights on starting and operating a small-scale 3PL business in Korea, from the perspective of both a logistics practitioner and a business owner.

Currently, I operate both a parcel delivery company and a fulfillment business—not large corporations, but rather small enterprises focused on SME clients. In this session, I’ll discuss how to launch a 3PL operation with limited capital and a small warehouse, and provide a realistic look into Korea’s saturated 3PL market.

What is 3PL?

3PL refers to outsourcing logistics processes—like inventory management, packaging, and shipping—to specialized external providers.In simple terms, it’s a subcontracting model for logistics services. For example, a manufacturer might send products to an external packaging service, then deliver them through B2B or B2C courier or freight services. 3PL acts as the intermediary that connects these stages.

The Changing Landscape of Korea’s 3PL Market

The business environment for small 3PL companies in Korea changed dramatically before and after COVID-19.Before the pandemic, logistics operations and revenue growth were steady. However, after COVID, online e-commerce demand exploded, leading to a massive surge in parcel volume. As more consumers shifted from offline to online shopping, the need for outsourced packaging and shipping services increased significantly.

This gave rise to many new entrants into the 3PL warehouse sector. With the growth of e-commerce platforms like Naver, TMON, WEMAKEPRICE, and Coupang, personalized selling by small-scale merchants surged, leading to higher demand for small 3PL service providers.

The Harsh Reality: A Saturated Market

However, Korea’s 3PL market is now overcrowded.As of the first half of 2024, the average vacancy rate for logistics centers in the Seoul metropolitan area was about 18%, up 6.6% from 2023. For cold-chain warehouses, the vacancy rate reached a staggering 41.2%.Why? Over-supply during the pandemic and a slowdown in e-commerce growth. Moreover, major players like Coupang dominate the market with large-scale fulfillment centers, making it harder for small warehouses to stay competitive.

Advice for Aspiring Small 3PL Entrepreneurs

1. Understand Your Target Market.

In an oversaturated field, it’s crucial to define your niche—whether it's frozen, refrigerated, ambient, or specialized small-parcel logistics.Seasonality also matters. If you only offer ambient storage, you may lose competitiveness during peak frozen/refrigerated product seasons. Cold storage providers must be equipped to handle fluctuating seasonal demand.

2. Start Small and Smart.

Avoid risky investments like leasing large-scale warehouses using retirement funds.Instead, consider starting with a small 60-pyeong (approximately 2,000 sq ft) warehouse. With about 3 million KRW (around 2,200 USD), you can cover the initial deposit, basic infrastructure, and utility costs.Think of your first year as attending a practical academy—learn by doing it yourself.

When I first started in 3PL, I operated a 40-pyeong warehouse. I began with simple tasks like labeling and shipping packages for parcel clients. That humble beginning laid the foundation for the business I run today.

📣 Summary Tips:

• Don’t follow trends blindly—know the market first.

• Start small, reduce risk, and learn operations hands-on.

• Choose your niche (cold chain vs. ambient, small parcels vs. bulk).

• Be prepared for seasonal fluctuations and rising vacancy rates.

• In Korea’s saturated 3PL landscape, precision beats size.

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