South Korea bracing for another truckers’ strike from 24 November
SINGAPORE (ICIS)–South Korea’s unionised cargo truck drivers are planning to stage an indefinite nationwide strike for the second time this year starting 24 November, potentially causing manufacturing and supply chain disruptions at major petrochemical sites.
The Cargo Truckers’ Solidarity (CTS) union affiliated with the Korean Confederation of Trade Unions has called for the government to extend its “Safe Trucking Freight Rate” policy beyond December this year.
The policy, which was introduced in 2020 and expires this year, guarantees a minimum annual wage to cope with surging fuel costs and to deter dangerous driving.
The union’s previous eight-day strike in June this year forced several producers in the petrochemical hub of Ulsan to consider production cuts amid logistics disruption.
South Korean officials promised to address the unions’ demand in June in a deal to end the strike but legislation to extend the subsidies involved in the policy has been held up at parliament.
The South Korean government this week offered a three-year extension to the system for the containers and cement sectors, but has declined the unions’ request to extend the benefits to certain other industries such as fuel and steel, according to local media reports.
The CTS union claimed that the government has failed to keep promises to continue the safe trucking freight rates system that both sides had agreed on in June on the condition of ending the previous strike which resulted in around $1.2bn in industrial losses.
Over 25,000 truckers are expected join the work stoppage and non-unionised drivers may also participate, risk management firm Crisis24 said in a statement.
“Previous strikes have caused significant nationwide commercial and shipping disruptions. Unless averted, the strike will seriously disrupt goods transport, especially of fuel and automobiles via major ports and industrial complexes such as Pohang, Ulsan, and Yeosu,” it said, adding that supply chain disruptions are possible if the strike is prolonged for several days.
South Korean transport minister Won Hee-ryong in a statement on 22 November urged the union to “immediately withdraw its plan” in light of the country’s economic situation.
On a quarter-on-quarter seasonally-adjusted basis, South Korea’s GDP growth slowed to 0.3% in July-September 2022, marking the slowest pace of increase since the third quarter of 2021 amid high inflation and slowing exports.
On an annualised basis, the country posted a 3.1% third-quarter GDP growth.
“Recently, with global inflation continuing, volatility in the global financial market and downside risks to the world economy are increasing, and the Korean economy is also facing a crisis,” Won said.
“It is a time when everyone needs to join forces, but many people are concerned about another group transport refusal in just five months after the cargo solidarity headquarters’ collective transport refusal in June caused great damage to the national economy,” he added.
Focus article by Nurluqman Suratman
Thumbnail image: Trucks parked at a ready-mix concrete factory amid truckers’ strike over wages and better working conditions in Seoul, South Korea on 03 July 2022. (Source: YONHAP/EPA-EFE/Shutterstock)
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