South Korea truckers’ strike results in $1.2bn of shipment disruptions in November

SINGAPORE (ICIS)–The ongoing truckers’ strike in South Korea has caused won (W) 1.6tr ($1.2bn) worth of shipment disruptions in November across all industries, with some petrochemical companies now looking to reduce production this week.

The estimated amount is for the first seven days of the strike up to 30 November, the Ministry of Trade, Industry and Energy (MOTIE) said on Thursday afternoon.

The strike is now on its eighth day.

Industry	Seven-day shipment disruptions (in bn won)
Cement	97.6
Steel	731.3
Car	319.2
Oil	442.6
Total	1,590.7

Source: MOTIE

“Concerns were raised that if the refusal to transport is prolonged, shipment disruptions will lead to production disruptions, and the scale of damage will expand to an enormous level,” MOTIE stated.

In the petrochemicals industry, “each company continues to produce the smallest amount of shipments (10-30% compared to normal), and some companies in the Daesan and Ulsan petrochemical complexes, which have completely stopped shipments, are considering reducing production from this week,” the ministry said.

A prolonged strike could result in a contraction in the South Korean economy in the fourth quarter.

Two rounds of negotiations this week between the unionised truckers and the government have failed.

It is the second time in six months that the Cargo Truckers Solidarity Union (CTSU), which is affiliated with the Korean Confederation of Trade Unions, has launched a nationwide strike.

On 29 November, the government issued an unprecedented executive order to force truckers working in the cement industry to go back to work, citing significant economic damage because a number of construction projects had to be halted.

In June, the nationwide strike lasted eight days with the economic toll pegged at $1.2bn. It ended with the government agreeing to truckers’ demands to extend a “Safe Trucking Freight Rate” system.

The policy, which was introduced in 2020, guarantees a minimum annual wage for truckers to help them cope with surging fuel costs and to deter dangerous driving. However, it is due to expire at the end of this year unless it is extended.

The CSTU has called on the government to make the system permanent and expand its coverage to include truckers in the oil and chemical sectors.

($1 = W1,306)

Focus article by Pearl Bantillo

Click here to read the Ukraine topic page, which examines the impact of the conflict on oil, gas, fertilizer and chemical markets.