South Korean production and shipping halted as truckers strike for third day

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A general view of Kia Motor’s finished cars parked and waiting to be transported by car transporters who are now on strike at their factory, in Gwangju, South Korea, June 8, 2022. Yonhap/via REUTERS

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SEOUL, June 9 (Reuters) – Thousands of South Korean truckers went on strike for a third day on Thursday to protest a sharp rise in fuel prices, disrupting production, slowing activity at ports and dragging down new risks in a strained global supply chain.

Presenting new president Yoon Suk-yeol with one of his first major economic challenges, around 7,200 members, or around 30% of the Cargo Truckers Solidarity union, were on strike, the country’s transport ministry said.

A union official said the number of participating members was much higher and they were also joined by non-union truckers.

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South Korean steelmaker POSCO (005490.KS) said it had been unable to ship around 35,000 tonnes of steel products daily since the start of the strike, equivalent to about a third of its daily shipments from these factories.

A South Korean auto industry group called the strike “extremely selfish”, saying it would put more pressure on the sector which has been hit by the global chip shortage.

Hyundai Motor Co (005380.KS) has seen production disruptions at factories in Ulsan, with truck drivers refusing to deliver components, Yonhap news agency reported. Hyundai Motor declined to comment on the matter.

A transport ministry official said there had been declines in shipments of some products, including steel and cement. But the country was not yet experiencing “significant disruption to logistics” and the government was meeting with relevant industry officials to avoid such a situation.

A Korean Shippers Council official said the impact was being felt at ports.

“There is only a minimal amount of cargo coming into ports at the moment. Until yesterday, the situation may have seemed okay because some pre-arranged cargo was being delivered, but the reality now is that it ‘is very difficult.”

The Busan Port Authority said an emergency response team has been in place since Monday and has prepared additional storage space outside the port. The port’s container occupancy rate is currently 76.3%, down from 73.9% two days ago.

FRUSTRATION OF TRUCKERS

The truckers, considered independent contractors in South Korea, are demanding wage increases and a promise that an emergency measure guaranteeing freight rates that was introduced amid the pandemic and due to expire in December will be extended . They also want it to apply to a wider range of trucks, not just container trucks and cement trucks.

“Due to soaring fuel prices and the government not doing enough to protect our livelihoods, our frustration is only growing,” said Kim Jae-kwang, a senior union official.

He said many truckers were on the verge of shutting down.

“Drivers of large cargo trucks pay an additional 3 million won ($2,390) in fuel costs while their monthly salary is around 3 to 4 million won.”

The Cargo Truckers Solidarity union is part of the Korean Confederation of Trade Unions, which is known to be more provocative than other major labor groups in their actions.

Police made more than two dozen arrests, including truckers’ union members who blocked the gates of Hite Jinro Brewery (000080.KS) in Icheon, southeast of Seoul, Yonhap News reported.

President Yoon, in power for only a month, on Thursday warned strikers not to resort to violence and said the government was trying to resolve the situation through dialogue.

“Under no circumstances will the public find acceptable the breaking of the law or the use of violence,” he told reporters.

($1 = 1,256.2200 won)

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Reporting by Heekyong Yang, Ju-min Park, Soo-hyang Choi and Byungwook Kim; Written by Jack Kim; Editing by Edwina Gibbs

Our standards: The Thomson Reuters Trust Principles.


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