Drivers end strike at Busan port

19 May 2003 00:00  [Source: ACN]

Lorry drivers at South Korea's main port of Busan have agreed to end a week-long strike.

An agreement was reached after talks between strike leaders and government officials early on 15 May. It was not clear at press time if strikers elsewhere around the country had also agreed to follow suit.

Details have yet to be released, but the 5000 strikers were demanding higher pay, reduced taxes and lower road tolls.

South Korean President Roh Moo-Hyun, who is on an official visit to the US, had instructed Prime Minister Goh Kun to minimise the impact of the strike at Busan and Gwangyang, sources at the ministry of commerce, industry and energy told ACN last week. The strike has hit the country's petrochemical exports badly.

Goh declared the strike illegal and ordered the arrest of striking drivers from the Korea Cargo Transport Workers Union if they obstructed the movement of cargo. The government also mobilised the military to help transport cargo - outbound and inbound. Lorries from private shipping companies were also mobilised for the purpose.

South Korea's petrochemical exports to China, Europe and the US have been hit hard by the strike, which has brought trade through the two ports to a standstill, a source at the Korea Petrochemical Industry Association (KPIA) told ACN.

About 35% of the country's petrochemical exports are routed through Busan and 14% through Gwangyang, the source added.

According to the KPIA, South Korean ports handled the following shipments - exports and imports - last year: 5.69m tonne of ethylene, 3.73m tonne of propylene, 848000 tonne of butadiene, 2.81m tonne of benzene, 1.68 m tonne of toluene and 1.96m tonne of xylenes.

The Korea International Trade Association (Kita) had warned that a few more days of the strike would cripple major manufacturing lines completely.

The drivers at the two ports stopped work on 9 May, although they had lodged a protest on 2 May, a Kita source said.

Kita statistics showed that, on 13 May, 8217 teu (20-foot equivalent unit) containers were stuck in Busan, causing some US$200m in losses. The southwestern port of Gwangyang was also seeing an average of 850 containers, worth US$14.9m, piling up each day.

The ministry of commerce, industry and energy estimated that the blockage of cargo traffic from the strike had delayed shipments worth US$450m as of 14 May.

Kita said about 400 drivers working for the Inland Container Depot in Uiwang in Gyeonggi province, near Seoul, joined the strike late Tuesday. Their action pulled down cargo handling at the Uiwang container yard below 40% of average, to 2196 teu containers, a Kita report showed.

The strikers were also joined by unionised drivers in Ulsan, north of Busan, dealing a further blow to major exporters in the region who were already hit by the paralysis of the Busan port.

South Korea's five largest business organisations, including the Korea Chamber of Commerce and Industry and the Federation of Korean Industries (FKI), said in a joint statement that the economy would be damaged irrecoverably if the country continues to be unable to export its products.

The statement also said the strike exposed the primitive nature of South Korea's logistics infrastructure. It said the strike should be a catalyst for a comprehensive reform of that infrastructure.

It said 'holes' in the logistics industry, such as the controversial system of 'multi-level middlemen', had existed for decades. Local business leaders have often said the underdeveloped logistics infrastructure is an obstacle to the country's goal of becoming the logistics hub of Northeast Asia.

The vice-chairman of the FKI, Hyun Myung-kwan, said the ratio of local firms' logistics costs to total sales stood at 14% - almost twice that in Japan or the US.

The vice-chairman of the Korea Employers Federation, Cho Nam-hong, said the current turmoil in logistics is partly a result of the government's pro-labour policies and lukewarm attitude towards illegal labour actions.

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