Overwork deaths of online distribution industry

: Night time delivery workers and the distribution center

Min Choi 

SEP 16 2022

中文    한국어    日本語

1. Background[1]

Since the 2000s, the delivery industry has grown explosively with the vitalization of e-commerce through the Internet, especially the increase in individuals' online product purchases.

In South Korea, based the logistics network which called a 'Hub & Spoke system’ is the main axis to establish a mass delivery system for the increasing amount of product delivery. The 'Hub and Spoke' system means that it collects the products from each spoke on the evening of the first day, gathers them to the main hubs through trunk vehicles, sorts them by region during the evening and early morning, and sends them back to each spoke via trunk vehicles. From the morning of the second day, delivery workers at each spoke (regional agency etc.) sort the products in their delivery area and deliver them to the final destination. Basically it is '2 days (D+1) delivery' system.

Among e-commerce companies, some focusing on fresh food have built their own separate overnight delivery (one-day delivery) system. Having secured its own logistics facilities and delivery vehicles that are different from the existing 'Hub and Spoke' system (although limited to the metropolitan area), the company started delivering products on its own. Market Kurly is a prime example. In Seoul and Gyeonggi areas only, if a customer order a product online (by website or mobile app) by 11 pm the night before, they provide a service called 'Saetbyul(means the morning star) Delivery', which delivers a product to front of door of the customer before 7 am the next day.

Market Kurly started its business in earnest in 2015 and has exploded in popularity mainly among one or two-person young households in Seoul and the metropolitan area. It completely shakes up the culture of working young people going to the grocery store on a weekday evening, a huge blow not only to the traditional delivery industry but also to offline retailers. In particular, the amount of online shopping has increased dramatically after the pandemic in 2020. There is a growing market demand for overnight delivery. Existing delivery companies also entered the night delivery market by establishing a logistics system for night delivery separate from the 'hub and spoke' system. 1)

It is Coupang which leads early morning delivery business. Coupang's corporate sales are growing rapidly from about KRW 7 trillion in 2019 to KRW 13.9 trillion in 2020 and KRW 22 trillion in 2021. But behind this growth, there are the sacrifices of workers. In May 2020, at the Bucheon Logistics Center, 152 people were collectively infected with Covid-19, including 84 Coupang workers and additional infections of the workers' families and residents. As night time delivery gradually spreads, the number of warehouse packaging managers, trunk vehicle drivers, and delivery drivers who are in charge of night delivery also accordingly increases. They have various health problems, including death from overwork.

2. Overwork working condition and overwork deaths of delivery workers

“I’m sorry to bother your sleep. I'm afraid I can’t get that address No 16’s, can I?

When I get home, it's 5 am in the morning. Eating and washing and going straight to the terminal, I can't even sleep and have to do some sorting again.

Yesterday I got home at 2am.

I arrived at 5 am today. I’m so tired.”

A message sent to a colleague by a delivery worker on October 8, 2020. The text was sent at 4:30 in the morning. He started working at 7 am and worked for over 21 hours until 4:30 am the next day, and died four days later from overwork[2].

According to the union’s count, 22 delivery workers died from overwork in 2020-21 alone. Delivery workers, who had been working very hard and long hours before the Covid-19, were exposed to the new burden of an infectious disease pandemic and a surge in distribution, and were put in danger seriously.

Two social agreements were reached in 2021 based on sympathy and solidarity of the public who face delivery workers every day, and the delivery workers who raised their voices. Instead of raising the delivery fee, which had been frozen for 30 years, it was an agreement using the increase to hire an additional manpower dedicated to sorting to lower the labor intensity. Calling this a 'social agreement' is not just because it is an agreement made by the 'social consensus organization for countermeasures against overwork deaths of delivery workers' in which the government and the ruling party participate. But also it was called a social agreement because it was an agreement reached with the sympathy and support of the public as workers and consumers living in the same era on the issue of overwork deaths of delivery workers.

However, there are clear limits to this social agreement. Coupang, the workplace where the most delivery workers died from overwork, did not join the social consensus organization. Unlike other delivery companies, CJ Logistics insists on the principle of six-day delivery or same-day delivery, and does not use the increase in the delivery fee to be used for the purpose of hiring dedicated personnel for cargo sorting. Delivery workers contracted with CJ Logistics went on strike for 65 days from December 28, 2021 to March 2, 2022. After that, the strike was stopped after signing a contract according to the standard contract, but another delivery worker from CJ Logistics died in June.

2022.6.14. a deliver worker collapsed at home while preparing for work at around 5:30 am, aynsferred to a nearby hospital, but died on the 16th. The union said the worker was a relatively young 48-year-old and had no medical problems. It's been a year since the social agreement to prevent overwork was made, but he had to work 12 to 13 hours a day for long hours and condemned the company.

3. Overwork deaths in the logistics center

The problem of overwork deaths, which has come up mainly to delivery workers, spreads to distribution centers along with the expansion of overnight delivery. At Coupang Logistics Center, a representative e-commerce company, 9 workers are estimated to have died from overwork between 2020 and 2021. Of these, as there were 6 workers in the distribution center, interest in not only delivery drivers, but also the labor conditions and overwork deaths in distribution centers increased in earnest[3].

A survey conducted from July to August 2021 for 356 workers at the Coupang logistics center. Although 69% of the respondents said they worked exclusively without any other job, 57.3% of the total respondents were daily workers, and 75% of all workers including 3-month and 9-month contract workers were chronically unstable.

The average working hours is 9 hours (excluding meal breaks), daily workers work 3-4 days a week, and contract workers work 5 days a week, so the working hours is not very long. But there was a lot of night time work. More than half of the respondents worked night shifts, and most of them did for economic reasons.

Also, the labor intensity is very high. 28.3% complained of working at an intensity (Borg score of 15 or higher) of running 100 meters while working. 12.4% of respondents said that they work very fast throughout the working hours, which is much higher than the 3.4% of the nationwide survey on the working environment. Looking at only simple labor workers in the working environment survey, it is 5.3%. It shows that the speed and intensity of Coupang's labor is very high. In particular, they complain of higher labor intensity at night[4].

The successive deaths of workers at logistics centers are a result of the expansion of night work, high labor intensity, and high job insecurity.

4. Epilogue

The bigger issue is that this problem is currently underway as it extends to other online shopping industries.

On July 5, 2022, a woman in her 50s working at the Incheon Homeplus Logistics Center died of cerebral hemorrhage. Recently, distribution companies such as Homeplus e-commerce and E-Mart pp center are expanding the same-day delivery system using offline stores. She had been in charge of moving the goods since last May, and usually went to work at 5 am, moved the entire amount allocated for the day, and left work. A union representative raised the possibility that she died from overwork, saying, "The deceased usually left work at 2 pm, but as online orders had increased by more than 30%, she often left work after 5 pm."

Workers in Coupang logistics center are occupying the headquarters lobby, demanding that air conditioners be installed in the workplace, saying that a large-scale distribution center built as a temporary building has no measures against heat waves in midsummer. Preparing for heatwave and extreme cold is also very important to prevent overwork. They have been occupying the lobby of Coupang's headquarters from June 23, 2022 and have been squatting, but the company has remained silent until 20 days have passed. Rather, it filed a suit for a criminal prosecution against union officials.

In order to prevent overwork deaths of rapidly growing distribution and delivery companies, it is urgent for society to regulate night-time work, to pay attention to and monitor the working environment after brilliant growth, and to expand the union organization.

[1]Lee Jeong-hee, Park Je-seong, Park Jong-sik, Lee Seung-ryeol. Night time work in the service industry: A suggestion for a human-centered division of labor, Chapter 6 Growth of the parcel delivery industry and night time work, 104~106, 2019

[2]Jo-eun Lee, night time work, the main culprit of overwork deaths, let's get rid of it now, Monthly Participatory Society 2021.July~August

[3]Jeon Joo-hee, Coupang Logistics Labor Environment Needs Emergency Intervention, Coupang Logistics Center Workers’ Work Environment Health Level Assessment in National Assembly Open Forum, Sep 30, 2021

[4]Kim Hyung-ryeol, Song Ji-hoon, You Hyung-sup, Coupang Logistics Center Workers Working Conditions and Health Conditions, Coupang Logistics Center Workers' Work Environment Health Level Assessment in National Assembly Open forum, Sep. 30, 2021