‘CC LOGIS’ on the brink of bankruptcy

Mr. Lee Joong-youl, president of CC Logis, fled the company with twenty employees following shortly thereafter, leaving the corporate bank account closed Feb. 2, and revealing the company’s bankrupt status.

In July 2000, the Woo-joo International Transport Co, Ltd changed its name to CC Logis and added its on-line forwarding services. CC Logis then secured a large amount of investment capital from “angel investors.” The company launched its on-line service with eye-popping PR strategies, using a celebrity as a model in their ads - a first in the forwarding industry. It also opened cyber-consol (www.cyberconsol.com).

With the help of these aggressive sales strategies, it drew 8,160 tons of cargoes in its first three months after its establishment while 1,400 businesses registered as members at the cite. It also sported the 'cyber LCL maritime console service,' which consisted of FCL (Full Container Load) cargoes done over the Internet.

Despite of its external expansion, it was minimally profitable, collecting a mere 70,000 - 80,000 dollars per ton. Running a deficit of over 100 million won every month, it was forced to cut back its employees 20% after six months. On-line business kept pace with off-line business, at first, but then the on-line services were switched to support its off-line business finally. The future of CC Logis is not clear as it failed to pay a 30 million won bond and closed its bank account on February 2.

On the condition of anonymity, one official at CC Logis said that it has been a long time since Mr. Lee and other employees left the company, though this is the first time it has failed to pay its bills.

Some people in the Korean shipping industry regard it as too early to be profitable through the internet alone. Others charged that Mr. Lee helped himself to the investment. This could be another big trial to slumping on-line businesses as well as investors.