South Korea’s construction projects halted as truckers’ strike hits fifth day

Pearl Bantillo

28-Nov-2022

SINGAPORE (ICIS)–A huge number of construction projects in South Korea have had to be halted as the unionised truckers’ strike in the country has been hampering deliveries of cement and steel deliveries over the past five days.

  • No deal in first round of talks, next round on 30 November
  • Daily losses estimated at $225m
  • Government looks at issuing return-to-work order for strikers

“Due to the freight union’s refusal to transport, only 5% of cement and 30% of ready-mixed concrete are shipped compared to normal, and it is understood that more than 250 construction sites have stopped construction due to the supply of ready-mixed concrete being stopped,” said the vice minister for transport, Lee Won-jae, said in a statement.

For the cement industry, unmet deliveries have so far cost Korean won (W) 46.4bn ($35m), news agency Yonhap reported on Monday, citing a government assessment.

“Since the construction industry is in full swing, damages such as suspension of construction work have begun in earnest. In particular, as the construction industry accounts for a high proportion of the national economy and the scale of related industries is large, a crisis in the construction industry can lead to a crisis in the national economy,” the vice minister added.

“To prevent the crisis in the construction industry from deepening, the government will activate the construction industry emergency response team in earnest to monitor the current status of material production and transportation and the current status of damage to the construction industry, and cooperate with related ministries such as the Ministry of Industry to normalize logistics as soon as possible,” Lee added.

The petrochemical and automotive industries are also bracing for possible supply disruption if the labour strike is prolonged.

This is the second time this year that the Cargo Truckers Solidarity Union (CTSU), which is affiliated with the Korean Confederation of Trade Unions, launched a nationwide protest, calling for the extension of the “Safe Trucking Freight Rate” policy beyond December this year.

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

No deal was achieved on Monday’s negotiations between the government and the strikers, according to media reports, while daily losses from strike, which started on 24 November, were at about Korean won (W) 300bn ($225m) based on government estimates.

The next round of negotiations will be on 30 November.

In June, economic damage from the eight-day truckers’ strike was estimated at $1.2bn.

Meanwhile, the South Korean government is contemplating issuing an executive order to force the workers to return to work, if the strike poses a serious threat to the national economy, interior minister Lee Sang-min was quoted by Yonhap as saying on Monday.

Punishment for defying this order can be up to three years imprisonment or a fine of up to W30m.

The potential issuance of the executive order by South Korean President Yoon Suk-yeol will be discussed at a cabinet meeting on 29 November, news daily Korea Herald reported, citing a statement from Yoon’s office.

Focus article by Pearl Bantillo

($1 = W1,335)

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