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Neighborhood Joint Delivery – Establishing a Regional Environmentally-friendly Integrated Delivery System

Neighborhood Joint Delivery was introduced in 2022 to solve delivery issues. Delivery volume in Seoul since 2015 has increased by about 2.8 times, causing traffic, environmental, safety and labor problems. Seoul will create regional bases that integrate services from several couriers to deliver parcels collectively, reducing distance traveled by 50% and improving efficiency by 40%. The eco-friendly bases will collect recyclables, and serve as a base for unmanned autonomous vehicles.

Innovation Summary

Innovation Overview

The recent proliferation of e-commerce and deliveries due to the spread of contactless transactions is a global phenomenon. In Seoul, over the past six years, deliveries have increased 2.8 times, and the number of parcels delivered per person also increased 2.8 times from 68 to 128. Nevertheless, private-sector delivery services continue to use an inefficient structure in which about 10 delivery firms compete for business, resulting in severe traffic (260,000 km in distance traveled daily), environmental issues (freight vehicles generate 1,160 tons of pollution per year), safety (50% increase in the number of fatalities caused by trucks in Seoul in 2021 compared to 2020), and labor (20+ delivery drivers died over the past two years).

The core goal of Seoul’s Neighborhood Joint Delivery is to improve delivery efficiency and create a foundation for new logistics innovation. The main feature and function of “Neighborhood Joint Delivery” is to reinvent the inefficient, repetitive structure of the delivery industry into an efficient delivery system. At Neighborhood Joint Delivery centers in each district, all shipments are collected and the delivery driver at the delivery center delivers parcels from several companies at once. In mountainous Seoul, there are 48 hard-to-reach delivery areas. Vehicle traffic is limited and delivery takes a considerable amount of time, which lowers profitability and leads to delivery drivers avoiding the area. If the joint delivery service is introduced, driver profitability and delivery problems can be resolved. Further, all parcels delivered from the Neighborhood Joint Delivery Center are delivered by eco-friendly electric vehicles to minimize emissions in the area.

Other key functions of the Joint Delivery Centers are:

  • The centers also allow (1) collection of recyclables from residents, (2) sorting and delivering items that have had their packaging removed, and (3) eco-deliveries when food is delivered in a multi-use container that is later collected.
  • Delivery drivers hired by centers provide care-focused delivery services that periodically visit welfare recipients to check up on their living conditions, and update local welfare centers.
  • Create an MFC for small business owners at centers. Small business owners can store goods at the center, and when an order is placed, delivery begins immediately.

To spur innovation, the Seoul Metropolitan Government invested 3.2 billion won in 2022 to create three Neighborhood Joint Delivery Centers, and after a trial period from ‘22 to '23, the program will be expanded to the entire city of Seoul after '24. In 2022, the city government chose three organizations through an open call for tenders, providing subsidies to establish centers for the first two years. These institutions must cover their operating expenses through their own delivery fees, and after two years, they must finance all expenses themselves. Through such support, sustainability was achieved and competitive companies were encouraged to participate.

Seoul paid attention to sustainability to avoid repeating previous failures. Several local governments have put in place Silver Delivery last-mile delivery model services that hire seniors over the age of 60 as delivery drivers to deliver parcels within a local area. In order to maintain the model, continuous employment subsidies were required. In the end, the business model was not sustainable, and it was difficult to maintain an efficient delivery system through the provision of jobs for the elderly.

Impact of Neighborhood Joint Delivery is the following:

  • Distance traveled by delivery vehicles in Seoul decreased by about 130,000 km
  • Through improved efficiency, delivery personnel required for local delivery (delivery vehicles) and working hours decreased by about 40%
    • Delivery volume per vehicle increased by 30% from 240 to 310 parcels
    • 40% reduction in working hours from 13 -> 8 hours
  • Zero emissions by converting existing diesel cargo vehicles to 100% electric vehicles

Innovation Description

What Makes Your Project Innovative?

Seoul’s Neighborhood Joint Delivery improves on delivery efficiency, transportation, environment, safety, and labor issues by integrating the previously fragmented private-sector delivery system. A sustainable and organic business model was created by negotiating volume and commission through voluntary agreements with delivery drivers, agencies, and firms.

The previous system was at a breaking point. Although labor is limited, deliveries have increased by 14% annually. Drivers were working more than 13 hours per day. The new model reduced the labor required through a voluntary agreement. Silver Delivery, first introduced in 2006, failed due to the need for large subsidies and affiliation with only one delivery firm. On the other hand, centers cover their own operating expenses through fees, and use an open model that integrates deliveries from about 10 firms. Scalability is secured through recycling collection, regional MFC bases, and high-tech autonomous delivery.

What is the current status of your innovation?

The project to create joint delivery centers for Neighborhood Joint Delivery, the first logistics innovation project in Korea to be attempted by the Seoul Metropolitan Government, was initially planned in 2021. Seoul established a master plan for innovation in the everyday logistics business such as in delivery services in February and secured a budget of 3.2 billion won for 2022. A business promotion agreement was signed with several partners in April.

The remodeling work of the joint delivery centers will be completed within the year, and delivery schedules are being coordinated with vehicle manufacturers (Hyundai, Kia, etc.) to secure eco-friendly vehicles. When the system is completed, it plans to deliver more than 700,000 parcels within two years, starting with about 70,000 deliveries from the end of 2022.

Innovation Development

Collaborations & Partnerships

Robin signed a contract with an apartment complex resident association and has been integrating deliveries of parcels to the complex for 10 years. Another partner, Wonders, is introducing an eco-friendly joint delivery model that recycles resources by collecting wrapping paper before delivery. Korea Postal Service Agency provides idle space within the Geumcheon Post Office for use as a delivery center.

Users, Stakeholders & Beneficiaries

  • The direct beneficiaries are citizens residing in the common delivery area. 360k households benefit from the joint delivery service.Residents can now receive parcels several hours earlier than before. Fewer delivery vehicles means less traffic and safer streets.
  • The indirect beneficiaries are citizens living near the common delivery area. Fewer trucks and less pollution enhance quality of life.
  • Local couriers benefit from shorter working hours, travel distances, and guaranteed brea

Innovation Reflections

Results, Outcomes & Impacts

Seoul’s Neighborhood Joint Delivery service, first introduced in ‘22, aims to achieve the following results within the next two years.

  • Delivery efficiency is enhanced through integrated delivery. Approximately 60 delivery drivers can handle the volume of deliveries previously handled by 100 workers.
  • By converting all delivery vehicles to electric vehicles, carbon emissions are reduced to zero. In addition, the environment is improved by recycling packaging materials for parcels through eco-deliveries. and collecting recycled products during delivery.
  • The working conditions of delivery drivers improve. Working hours are reduced from 13 hours to 8 hours daily, and the distance traveled by freight vehicles is decreased from 42 kilometers to 20.
  • A 40% reduction in the number of freight vehicles operated and a 5-hour reduction in their operating time boosts traffic flow and minimizes the number of accidents caused by freight vehicles.

Challenges and Failures

When Seoul’s Neighborhood Joint Delivery service was initiated for the first time in Korea in 2022, the first model used was a project promotion model for local districts. This led to early failure, as it proved difficult to secure a space to create a community delivery center and there was no existing model to follow.

Afterwards, the city of Seoul altered the business model and the city recruited private organizations to carry out the project directly. Afterwards, the city of Seoul re-issued an open call for the private sector, and private firms participated in the city’s request by finding a site to build a joint delivery center. A total of 7 organizations applied, and the city government selected 3 partner organizations.

Seoul plans to carry out the project directly in 2022, and if the project proves a success, many autonomous local districts will likely participate in the project in the future.

Conditions for Success

The most important condition is obtaining the consent of local residents where the joint delivery center will be established. About 15 to 25 delivery vehicles are needed for integrated delivery within the region. If local residents oppose the center, its sustainability will be in doubt. To prevent such problems, Seoul established a Neighborhood Joint Delivery center adjacent to a major 8-lane road and away from schools and residential clusters.

Citizen support for the necessity of the project is also needed. Since this is a project to solve the transportation, environment, safety, and labor problems caused by the increasing number of deliveries, Seoul considers the active promotion of the public nature of the project a priority.

To secure a stable delivery volume for the service, which integrates parcels from 10 delivery services, the participation of such companies is essential. Seoul has been encouraging such participation and cooperation through several rounds of meetings.


Seoul's Neighborhood Joint Delivery system is a good model to emulate elsewhere because of its sustainable business model that does not require continuous subsidies after support at the initial stage.

Although the project is limited to Seoul this year, next year it is expected to expand nationwide. The relevant ministry (MOLIT) has already selected it as a promising project deserving of support. The Ministry is providing about half of the necessary budgetary support, and after evaluating the results of trial operations in Seoul in this year, plans to expand it nationwide after 2023.

This initiative has also led many private courier firms to introduce their own ‘joint delivery systems’. Hanjin, CJ, and Lotte are hoping to participate in the project starting next year. As private-sector participation increases, the system is expected to grow more rapidly.

Lessons Learned

The Neighborhood Joint Delivery service is a world first for the city of Seoul. As such, the first open call was targeted at local districts, but failed due to a lack of interest. The lack of a track record was the biggest reason local districts did not participate. For this reason, the city decided to get involved directly.

There is a need to create a successful model by promoting the project early on, rather than waiting for other organizations to step in.
It was critical to secure a space for construction prior to implementation. When the request was first made, the city expected local districts to find the necessary space. However, there was practically no such space available. To resolve this, the project was designed to secure space for the centers directly from the private sector. When the city made this change, 7 companies secured a site for the joint delivery center and signed on to the initiative.

Anything Else?

Issues related to logistics in daily life due to the proliferation of contactless transactions are a growing concern not only in Seoul but around the world. In order to solve this problem, the city of Seoul looked for case studies of other countries and cities, but could not find a reference model. In the end, Seoul Metropolitan Government decided to take the initiative and promote a new policy to reimagine the existing delivery system.

Neighborhood Joint Delivery is a project that shows how private-sector inefficiencies can be improved upon and public goods such as transportation and the environment can be enhanced through public sector intervention. If the city of Seoul succeeds in this new initiative, we expect the Neighborhood Joint Delivery model to spread widely not only in Seoul but also to other countries and cities globally.

Year: 2022
Level of Government: Local government


  • Implementation - making the innovation happen

Innovation provided by:

Date Published:

2 January 2023

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