Lotte Global Logistics wins additional LG Energy Solution ESS contract, eyes North America special cargo expansion

Lotte Global Logistics has secured additional contracts to transport battery energy storage systems, or BESS, produced by LG Energy Solution in the United States, stepping up its push into the North American special cargo market. The company plans to leverage its proprietary logistics expertise to expand its high-value special cargo business.

Lotte Global Logistics announced Monday that it has been handling inland transport of BESS units produced by LG Energy Solution at its Phoenix, Arizona facility since the first half of this year, and will expand the volume to roughly three times the first-half figure in the second half. The company will deliver a significant portion of LG Energy Solution's US shipments to customers across the country.

BESS are facilities that store electricity in large-capacity batteries and release it on demand. They can offset the intermittent nature of renewable energy sources such as solar and wind power, and are also used to ease strain on the power grid during periods of peak demand or to provide backup against outages.

Transporting BESS is considerably more complex than handling ordinary freight. The systems are heavy and expensive, requiring careful management of shock and damage risks throughout the shipping process. Long-haul transport within the United States must also comply with a range of safety standards set by the Federal Motor Carrier Safety Administration.

Lotte Global Logistics has deployed dedicated local staff and strengthened its transport management systems for the project. Rather than simply dispatching vehicles, the company manages driving conditions, routes and all related documentation in an integrated manner.

The company is also deploying its proprietary AI logistics platform, "Shipt." The platform tracks vehicle operations in real time to adjust routes, while a program using a large language model automates repetitive tasks such as drafting reports and invoices.

LG Energy Solution's rapid expansion of its ESS business in North America also points to further growth in logistics volumes. The company's ESS sales in the first half of this year rose 4.6 times from the same period last year, reaching the high-20-percent range as a share of total sales, driven by increased operation of its North American production facilities.

LG Energy Solution is also actively converting electric vehicle battery production lines to ESS output. The company is shifting some capacity at five of its six US pouch-type battery factories to lithium iron phosphate batteries for ESS use.

Battery makers' expanding US production is opening new opportunities for the logistics industry as well. Demand is growing not only for international shipping of finished products and components into the United States, but also for inland transport of large batteries manufactured at local factories to power generation facilities, data centers and grid projects across the country.

Lotte Global Logistics plans to use the LG Energy Solution contract as a springboard to expand its high-value special cargo business in the United States.

"This contract is the result of Lotte Global Logistics's advanced logistics capabilities and local responsiveness being recognized in the global market," a company official said. "We will use this as a foundation to further solidify our position in the North American high-value logistics market."