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South Korea to Meet Striking Truckers as Supply Chains Suffer

The strike has seen container traffic at ports drop 19% and the country’s cement industry estimates its suffered an $28 million output loss


Thousands of truckers began their second major strike in less than six months on Thursday
A truck drives between containers at a terminal at Incheon port, South Korea, May 26, 2016. Photo: Reuters

 

South Korea transport chiefs are set for summit talks with the country’s striking truckers union on Monday as they seek an end to a national strike that has hit key supply chains across one of Asia’s economic powerhouses.

Thousands of truckers began their second major strike in less than six months on Thursday, seeking better pay and working conditions. 

The action is disrupting supply flows across the world’s 10th largest economy, particularly affecting automakers, cement and steel producers.

The impact is already being felt at construction sites, while workers at Hyundai Motor’s Ulsan factory are delivering new cars by driving them directly to customers.

 

Read more: South Korea’s Yoon Warns of Crackdown on Truckers Strike

 

A union official confirmed Monday’s meeting, which would be the first official dialogue between the two sides.

The transport ministry said about 5,000 people took part in the strike on Saturday in 136 locations nationwide, down from 9,600 on the first day of the strike.

Container traffic at ports dropped to 19% of normal levels as of 5pm (0800 GMT) on Saturday, the transport ministry said, down from 35% of normal levels in the morning.

The transport ministry expressed concerns about disruption in the supply of gasoline and kerosene if the strikes are prolonged, as about 80% of truckers carrying oil products for major refiners such as SK Innovation’s SK Energy and S-Oil Corp are members of the trucker union.

The cement industry estimated an output loss of about 37 billion won ($27.7 million) as of Friday, said lobby group Korea Cement Association. It added that the industry only managed to ship about 20,000 tonnes of cement on Friday, about 10% of usual daily shipments.

 

President Accuses Truckers of Holding Country ‘Hostage’

South Korean President Yoon Suk-yeol warned on Thursday that the government would consider various options, such as issuing an order to break up the strike, calling it an illegal and unacceptable move to take the national supply chain “hostage” during an economic crisis.

According to South Korean law, during a serious disruption to transport the government may issue an order to force transport workers back to their jobs.

Failure to comply is punishable by up to three years in jail, or a fine of up to 30 million won ($22,550).

The Korea International Trade Association (KITA) received 53 reports of disrupted logistics from 31 companies since the strike began.

 

  • Reuters with additional editing by Sean O’Meara

 

Also on AF:

China Keen to Speed up Free-Trade Talks With South Korea: Xi

South Korean Economy Slowing, October Exports Fall 5.7%

 

 

Sean O'Meara

Sean O'Meara is an Editor at Asia Financial. He has been a newspaper man for more than 30 years, working at local, regional and national titles in the UK as a writer, sub-editor, page designer and print editor. A football, cricket and rugby fan, he has a particular interest in sports finance.

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