This study examines the logistics efficiency effects of palletized shipments and analyzes the determinants of pallet adoption in Korea’s fresh agricultural distribution system, focusing on the Garak Wholesale Market. Although palletized shipments ha...
This study examines the logistics efficiency effects of palletized shipments and analyzes the determinants of pallet adoption in Korea’s fresh agricultural distribution system, focusing on the Garak Wholesale Market. Although palletized shipments have been promoted as a key policy instrument for logistics standardization and mechanization, substantial differences in pallet adoption rates persist across commodities. This suggests that palletization is closely associated with the structural characteristics of agricultural production and distribution systems rather than being solely a matter of technological adoption or policy support.
The study consists of two complementary analyses. First, the logistics efficiency effects of palletized shipments are evaluated using watermelon as a representative case commodity. The analysis compares palletized and non-palletized shipments in terms of unloading costs, handling time, labor requirements, and auction floor space utilization. The results indicate that palletized shipments significantly improve logistics efficiency by reducing unloading costs, shortening handling time, decreasing labor requirements, and enhancing the utilization of auction floor space. These findings demonstrate that palletization contributes substantially to the modernization and operational efficiency of wholesale market logistics systems.
Second, the study investigates the determinants of pallet adoption using commodity-level panel data for peaches, pears, strawberries, and watermelons covering the period from 2001 to 2024. To identify the factors influencing pallet shipment rates, pooled ordinary least squares (OLS), two-way fixed effects (FE), and fractional logit models are employed. The empirical results reveal that pallet adoption is influenced not only by policy interventions but also by structural characteristics of production and distribution systems. In the two-way fixed effects model, shipment volume per producer, facility cultivation rate, and transaction size exhibit positive effects on pallet shipment rates, whereas regional concentration and Garak Market share show negative effects. The interaction term representing the mandatory palletization policy for watermelon after 2016 has a significantly positive effect, indicating that institutional intervention can promote pallet adoption when supported by favorable structural conditions. Notably, while the ratio of fixed-price and negotiated transactions loses statistical significance after controlling for commodity and year fixed effects, the facility cultivation rate becomes statistically significant. This finding suggests that changes in production systems within commodities, as well as structural characteristics of agricultural supply chains, play an important role in explaining pallet adoption.
The findings imply that the expansion of palletized shipments should not be viewed merely as a logistics technology issue but as a structural issue embedded within agricultural supply chains. Therefore, policies aimed at increasing pallet adoption should go beyond simple financial incentives or equipment support and focus on improving the underlying production and distribution structure through shipment standardization, farm consolidation, collective marketing, and logistics standardization. By integrating logistics efficiency analysis with an examination of structural determinants, this study provides a comprehensive analytical framework for understanding palletized shipment adoption and offers policy implications for improving logistics efficiency in agricultural wholesale markets.
Key Words: Palletized Shipment, Logistics Efficiency, Agricultural Wholesale Market, Logistics Standardization, Two-Way Fixed Effects Model, Fractional Logit Model