South Korean telecommunications giant KT Corp. on Monday said it has signed a memorandum of understanding with a Singapore-based postal service provider to drive digital transformation in logistics.

Under the partnership, KT and Singapore Post, or SingPost, agreed to pilot digital logistics transportation optimization in seven regions across Singapore, leveraging the Korean telecommunications company’s artificial intelligence transportation platform, Logistics Intelligence Suite for Fleet Optimization (LIS’FO), KT officials said.

The two firms will also take KT’s AI-based prediction solutions into the Singapore firm’s unique logistics offerings and local environmental challenges to calculate the optimal travel routes and offload information from the initial transportation planning stage.

KT said LIS’FO is expected to optimize SingPost’s first-mile network operations for greater efficiencies in cost and productivity, reducing total mileage by 27 percent and the number of vehicles by 15 percent.

“Considering the maturity of Singapore‘s IT infrastructure and e-commerce market, the logistics market is a tough one to tackle with a high level of complexity. However, KT sees this as an opportunity to demonstrate the technological prowess of its digital logistics platform,” said Choi Kang-rim, head of AI mobility business at KT.

SingPost provides nonstop services, covering over 1,000 customer locations and facilitates transportation for tens of thousands of shipments to their logistics centers. It plans to derive digital transformation by leveraging strategic collaboration, utilizing AI, big data and the global ICT expertise of KT.

“We are very excited to work with KT, as being a like-minded partner, we share the same vision in harnessing the power of AI and DX solutions to foster business growth,” said Eric Yeo, head of business technology solutions and property at Singapore Post.

“SingPost manages a substantial volume of logistics data annually, and there is immense potential for greater collaboration with KT to establish a paradigm of mutual success in Singapore.”

Meanwhile, KT established itself in the domestic market after launching three major digital logistics platforms -- LIS’FO, AI fulfillment platform LIS’CO and AI freight brokerage transportation platform Brokarry -- recording sales of 75 billion won ($56.3 million) last year, and expecting more than a twofold revenue growth in 2023. While proving its potential within the domestic digital logistics market, KT is also gearing up to challenge the global market.

After launching its three major digital logistics platforms last year, KT has applied the technology to 96 logistics sites nationwide covering about 1,300 vehicles per day, including the top five large distribution companies here.

Based on its solid growth in the domestic market, the Korean telecommunications giant also looks to make an active foray into the global market to expand its presence in digital logistics.