Incheon International Airport welcomes new CEO Lee Hak-jae: Reaching new heights in logistics

Visionary focus on smart logistics clusters and global network expansion

The new CEO, Lee Hak-jae, is set to push the logistics of Incheon International Airport into a new era. His leadership promises to breathe new life into the airport’s logistical operations and realize his vision of establishing Incheon as a global logistics hub.

President Lee was born in 1964 and graduated from Seoul National University and obtained his master’s and doctoral degrees from Chung-Ang University. He previously served as mayor of the Seo-gu office of Incheon Metropolitan City, and was a three-term member of the 18th to 20th National Assembly of Korea.

In his opening speech, Lee highlighted the pivotal junction where Incheon International Airport currently stands. “Due to the post-pandemic era and digital innovation, we are facing a massive shift in our business management environment,” he said. He highlighted the importance of Incheon’s leadership of the global airport industry, and emphasized, “We must become the ‘first mover’, creating value.”

Lee’s commitment to creating a “smart logistics cluster” is to transform Incheon International Airport into an integrated global mega hub.

The initiative will prioritize several key areas, such as developing a smart freight terminal, a joint distribution center for small and medium-sized enterprises (SMEs), expanding the global network, and attracting air freight and logistics professionals, including e-commerce and 3PL companies.

Paving the way for the smart charging station project

Incheon International Airport is steadfast in its commitment to developing a smart cargo terminal based on future technology, with the aim of strengthening its competitive position in the field of air freight and logistics.

Through Business Process Reengineering (BPR), the airport is partnering with experts from Korean Air and Asiana Airlines to shape future operations for the smart cargo terminal. These new measures will integrate the technologies of the Fourth Industrial Revolution, such as unmanned robots, artificial intelligence, big data, and autonomous driving.

A pilot project slated to become operational by 2027 will assess the suitability of IT technology for charging station operations and guide the development of a smart charging station.

Strengthening global networks and amplifying the volume of goods

Expanding the global network remains one of the primary areas of focus for Incheon International Airport. As of December 2022, the airport’s dedicated cargo routes connect to 107 cities across 43 countries via 25 airlines.

The connections include 20 locations in China, 6 in Japan, 10 in Southeast Asia, 27 in North America, 5 in Central and South America, and 18 in Europe. Including passenger flights, Incheon Airport’s air network provides uninterrupted connections to 152 cities across 53 countries throughout the year.

In a concerted effort to expand the new network and increase cargo volume, Incheon International Airport is offering various incentives to airlines. These benefits range from subsidies that cover up to 100% of landing fees and actual marketing expenses for two years, particularly for those newly incorporated, starting new routes or doing night operations. The airport also provides additional benefits to airlines that show an increase in cargo volume.

Moreover, Incheon International Airport is carrying out joint marketing initiatives using these incentives. In partnership with 12 airlines, the airport holds information sessions and runs joint online advertising campaigns to attract higher cargo volumes.

From now on, Incheon International Airport is committed to formulating aggressive strategies to expand the cargo transportation network. Through strategic cooperation with global companies, the airport aims to establish itself as a global hub, and push itself into a new chapter in logistics operations.

Opening the runway for small and medium enterprises: developing the joint distribution center

Incheon International Airport is making great strides in enhancing logistics capabilities for small and medium enterprises. Known for offering a range of benefits to tenants in its logistics park, the airport is now accelerating its focus on creating a dedicated logistics hub for small and medium enterprises, a step forward in its ongoing commitment to enhancing social value.

In partnership with the Korea Agency for Small and Medium Enterprises and Startups (KOSME), the airport has committed to developing a joint distribution center. This initiative, specifically designed to serve e-commerce businesses and SMEs, supports the airport’s mission to enhance air cargo logistics competitiveness for SMEs and support their global expansion.

The joint distribution center is scheduled to open in the latter half of next year and will occupy approximately 25,400 square meters within the airport’s second logistics complex. Equipped with the latest smart logistics equipment, the center aims to provide a comprehensive range of export-related services to e-commerce enterprises and SMEs.

Last June, KOSME appointed the Smart Trade Hub Consortium (STH Consortium) to manage the exclusive joint logistics center for SMEs and formalized this appointment with an operating contract.

STH Consortium is comprised of five diversified companies – including large corporations, general companies and SMEs – and STH Consortium will provide comprehensive logistics services, such as product warehousing, transportation, and export customs clearance, to SMEs exporting air freight over the next 10 years.

Attracting air freight companies and specialized logistics services

At the same time, Incheon International Airport is stepping up efforts to attract specialized air cargo and logistics companies, with particular attention to the booming air cargo market in the Asia-Pacific region.

As of 2022, the Asia-Pacific region holds the largest share of the global air freight market with a share of 32.4% (Source: IATA), successfully establishing itself as a global leader in the air freight logistics industry.

Notably, Northeast Asian countries have emerged as significant contributors to the air freight industry in the Asia-Pacific region, accounting for around 60% of the total regional volume.

The strategic location of Incheon International Airport, which connects major cities in China, Japan and Southeast Asia, can be considered as one of the many advantages that Incheon International Airport provides to logistics companies. Furthermore, the airport boasts the most economical operating costs in the region, including ground handling fees and landing fees, compared to other major regional airports.

The Airport Free Trade Zone (ICN Free Trade Zone) provides the fastest customs procedures among all member states of the World Customs Organization (WCO). In line with government guidelines, the airport continues to improve its policies for operating a Global Distribution Center (GDC).

The GDC at Incheon International Airport is mostly used by e-commerce companies and serves as an international logistics hub. Provides warehousing for global shippers’ products and manages their classification, repackaging and shipment according to individual order requirements.

Many prominent companies have already taken advantage of the advantages offered by the airport. ASML Holding NV, the world’s largest semiconductor equipment supplier headquartered in the Netherlands, established GDC at Incheon International Airport as early as 2008. Similarly, iHerb, a leading e-commerce company specializing in vitamins and health supplements, has named its Incheon International Airport GDC in 2018.

In addition, DB Schenker, a global logistics company from Germany, operates a distribution center at the airport, and Spasys1, an e-commerce logistics center that mainly deals with clothing, started to build a GDC at Incheon International Airport last year.

In the future, Incheon International Airport is expected to continuously attract global logistics companies to its second logistics park. The airport is currently engaged in fruitful discussions with several global logistics companies (3PL).

Under the leadership of its new CEO, Lee Hak-jae, the airport is focusing on expanding its logistics services through a variety of strategies. Lee places a strong emphasis on customer feedback, believing that “the answers lie in the field.”

Reflecting on Incheon International Airport’s future-oriented approach, Lee Hak-jae emphasized, “Through continuous investment in the development of logistics infrastructure and networks, Incheon International Airport aims to adapt to evolving air cargo market conditions and establish itself as a leading air cargo hub in the world. .”