For the second time in a matter of months, truck drivers in South Korea started a strike on Thursday morning threatening major disruptions across the supply chain and specifically targeting the ports and auto industry. The previous strike in June 2022 spread over the course of a week to involve tens of thousands of drivers with the government estimating the economic damage at $1.2 billion.
As a condition to end the eight-day strike in June, South Koreaâ€™s Transport Ministry had agreed to look into expanding the trucking freight rates system to cover additional products. On Tuesday this week, November 22, the Cargo Truckers Solidarity Union (CTSU) announced that the union had decided to resume the strike due to the governmentâ€™s failure to increase the minimum wage and keep its promise to renew the Safe Trucking Freight Rates system.
It is estimated that over 22,000 unionized truckers walked off the job earlier today. While it is only a small fraction of Koreaâ€™s more than 420,000 unionized drivers, reports indicate that the union leaders instructed members to block key transport locations, including in Uiwang, Busan, and Pyeongtaek. These cities are home to South Koreaâ€™s major industrial plants and ports.
Among the locations targeted by the drivers are South Koreaâ€™s main container ports. The Ministry of Land, Infrastructure and Transport confirmed that container movement was off by 60 percent today with less than 15,000 TEU handled at ports including Busan and Gwangyang.
Members of the CTSU are reported to be concentrated in important sectors including the shipment of cement, steel, automobiles, and petrochemicals as well as containers. They have also grown in number to represent more than half the petroleum tank truck drivers.
Hyundai Steel said during the first day of the strike it could not move over 8,000 tons of steel products at its Pohang factory. Other industries are likely to be hit if the strike continues including the automakers. During the strike in June, Hyundai vehicle production at the Ulsan factory fell to below 60 percent of the normal output and the trade ministry estimates the June strike cost automakers more than $188 million.
â€œWe have no choice but to stop all logistics in Korea,â€ said CTSU Head Lee Bong-ju. â€œThe government and the ruling party misled, and openly defended capital saying that truckersâ€™ income levels were not low and if the Safe Freight Rate system were expanded, prices could rise due to increased logistics costs.â€
Citing the rising cost of fuel, the drivers have been demanding increased minimum wages as well as the renewal of the rate system, which guarantees minimum cargo rates for truck drivers and sets safety rules. The system was introduced in 2020 and expires at the end of this year, while the union is demanding a three-year extension.
Speaking earlier this week, the transport minister argued that the Safe Freight Rate system has been proven not to improve the safety of truckers, insisting it is designed to raise trucking income while increasing logistics costs. The government however indicated that it was supporting the extension of the system but according to the union it would only be renewed for container and cement truckers.
The government had threatened in June to break up the strike but was able to get the drivers back to work with a promise of further negotiations. The CTSU contends there has been no progress in the past six months saying that it is prepared to strike until legislation to make the Safe Rates system permanent and expand the coverage to more sectors is passed in the National Assembly.
The Ministry of Land, Infrastructure and Transport responded by saying it was taking steps to lessen the impact of the latest walkout while warning quick action if the drivers took illegal actions blocking shipments. They have threatened to impose a back-to-work order that would be punishable by jail and fines.