Coupang faces several billion won in losses as Incheon warehouse fire burns into second day

A massive fire at a Coupang logistics center in Incheon continued burning for the second day on Sunday, raising concerns that the company's losses could skyrocket as firefighters struggled to bring the blaze under control.

Industry sources estimate the damage could amount to several hundred billion won, or several hundred million dollars, taking into account losses to the building, inventory and business operations. Delivery delays are also expected in some areas served by the facility.

The fire broke out at around 6:54 a.m. on Saturday on the sixth floor of Coupang's No. 32 logistics center in Seohae District, Incheon. The flames spread to the seventh floor.

All 121 employees inside the building evacuated safely, while two firefighters were injured during firefighting operations.

As of Sunday morning, the fire had not been fully extinguished, and authorities said it would likely take considerable time to bring the blaze under complete control.

The Incheon facility is one of Coupang's key logistics centers, primarily storing merchandise that the company purchases directly and delivers through its Rocket Delivery service. The eight-story building has a total floor area of 299,000 square meters (29.9 hectares), roughly equivalent to 42 football pitches, making it more than twice the size of Coupang's Deokpyeong logistics center in Icheon, Gyeonggi, which was devastated by a major fire in 2021.

To combat the blaze, the National Fire Agency on Saturday issued a nationwide mobilization order covering Seoul, Gyeonggi, North Chungcheong, South Chungcheong and Gangwon. More than 480 firefighters and 169 pieces of equipment were deployed.

Still, the fire remains difficult to extinguish because of the warehouse's structure and the nature of the goods stored inside.

The fire started in a warehouse on the sixth floor, where merchandise, namely household goods, was stacked densely on three-tier shelving.

Cardboard boxes, plastic packaging and plastic household products burn rapidly, generating intense heat and thick smoke. Flames can reignite even after visible fires are extinguished because embers penetrate deep into stored goods. The densely packed shelving also makes it difficult for firefighters to reach the source of the fire, while extreme temperatures inside the building have hampered firefighting efforts.

The cause of the fire has not yet been determined. After the fire is fully extinguished, police and fire authorities plan to conduct a joint investigation with the National Forensic Service. Investigators will examine records from the facility's automated systems and electrical wiring and assess whether sprinklers and fire alarms functioned properly.

Delivery delays are expected in parts of Incheon and western Seoul served by the warehouse. But according to industry speculation, Coupang is likely to redirect inventory from nearby facilities to minimize disruptions using its logistics centers located nationwide.

Coupang plans to provide customers with compensation coupons worth several thousand won, or several dollars, if deliveries are delayed.

"We will actively provide support to residents affected by this fire," Coupang Fulfillment Services CEO Chung Jong-chul said. "We sincerely apologize to residents in the Incheon area and to the public for the concern this incident has caused."

Coupang said Sunday that it has begun providing emergency relief to residents living near the warehouse and to firefighters battling the blaze.

Beginning Saturday evening, the company delivered relief supplies to Sinhyeon Elementary School in Incheon, which is serving as an evacuation shelter. The supplies included 100 mattresses, more than 100 sets of underwear, hundreds of packs of wet wipes and tissues and 500 cups of instant noodles. The company will secure additional relief supplies if needed.

The company has also been supplying firefighters with daily necessities such as toothbrushes and cell phone chargers, as well as snacks and beverages. It said it will continue providing additional assistance in consultation with Seohae District Office and other relevant authorities.

Coupang previously experienced a major warehouse fire in June 2021 at its Deokpyeong logistics center in Icheon.

That fire was fully extinguished six days after it began, and one firefighter died in the line of duty. The warehouse, which had two basement levels and four aboveground floors with a total floor area of 127,000 square meters, was destroyed. Property and inventory losses were estimated at between 400 billion won ($268.9 million) and 600 billion won.

BY LIM SUN-YOUNG [[email protected]]