Thousands Of Truckers Strike In South Korea
An estimated 25,000 people are reported to have joined a strike in South Korea this week, to increase their pay and improve working conditions.
The action is already disrupting supply chains across the country, heavily impacting automakers, steel producers and the entire cement industry. Consequently, South Korean president Yoon Suk-yeol has threatened legal action.
His government is accusing the truckers of holding the logistics country’s supply chain hostage. Should they continue to strike, they have threatened to issue a work start order. The first in South Korea’s history.
Here’s how we got to this point…
Growing discontent amongst workers
This is the second time in six months drivers have gone on strike for higher pay. But now their wages aren’t the only issue up for debate. They also want to expand the Safe Trucking Freight Rates System, along with the goods it covers.
The Safe Trucking Freight Rates System establishes a minimum freight fare so that workers aren’t pressured into driving dangerously in order to make more deliveries. Currently it only covers shipping containers and cement, and is set to expire at the end of 2022. Union workers are calling for this to be changed.
But talks have broken down. And now several industries, perhaps most notably the cement industry, have been suffering significant losses. According to the Korea Cement Association, these losses amount to an estimated 19 billion won ($14.26m). At this rate, construction sites are at risk of running out of building materials within days.
Government to use controversial legal action
As of 28th November 2022, the industrial action taken by drivers has cost the government an estimated 300 billion won ($224 million) per day. So in response, the government plans on legally compelling the strikers to return to their roles via a work start order.
A work start order forces transport workers back to their jobs during any serious disruptions. Failure to comply is punishable by up to three years of jail, or a fine of up to 30 million won ($22,550). The truckers’ union have criticised this decision, accusing the government of being unwilling to engage with them.
They argue that President Yoon is threatening a hardline response without making any attempts to stop the strike. But with the nation currently suffering a slump in growth, there is pressure on the government to be seen to prevent poor economic forecasts.
Container traffic remains down
While no action has been taken yet, public opinion could side with the government as levels of container traffic at ports are way below average. This week alone traffic at ports was 21% that of normal levels.
Steel shipments have halved, and some petrol stations are reported to run out of gasoline. But now, with such controversial action being threatened against those on strike, it’s uncertain which party will fold first.
Until the situation is resolved, logistics companies that move goods through the area are being advised to prepare for potential delays and disruption. So, if you believe you might be affected by the situation, or if you’re looking to enhance your supply chain, get in touch with the team today on our contact form.