South Korea Truckers Go on Strike at Ports as Fuel Costs Soar

Date: Wednesday, June 8, 2022
Source: Bloomberg

Thousands of truck drivers in South Korea have gone on strike at major ports and container depots, posing the latest threat to strained global-supply chains.

The truckers union, which is seeking to prevent a change to wage rules, is holding protests at 16 locations across the country, according to the International Transport Workers’ Federation. Transport has slowed or stopped to the Busan New Port, Pyeongtaek Port and Uiwang container depot in Gyeonggi province, the federation said Wednesday.

The strike come at a time when global supply chains are struggling to recover from lockdowns in China’s cities and Russia’s invasion of Ukraine. While not all of the nation’s drivers are taking part in the protests, the rallies threaten to slow South Korea’s exports of everything from steel to plastics and consumer goods if they go on for weeks, local media said.

Busan is the world’s seventh-largest port, handling 23 million container boxes last year, according to Korea’s Ministry of Oceans and Fisheries.

“The impact of the strike is already being felt at ports, petrochemical complexes, and other logistics hubs,” said the ITF, which is affiliated with the group on strike -- the Cargo Truckers Solidarity division of the Korean Public Service and Transport Workers’ Union.

Almost all trucking activity at petrochemical complexes in Ulsan, Yeosu and Daesan has stopped, the union said in an update on its website Wednesday.

Posco said it is struggling to ship a total of 35,000 tons of steel from its two plants to points within the country, down from the usual daily delivery of about 100,000 tons. Strikes are taking place at steel ports Pohang and Gwangyang, according to an ITF spokeswoman.

Tire maker Hankook Tire & Technology Co. couldn’t move any tires from its plant in Daejeon on Tuesday, compared with its typical daily shipment of about 70 containers. More than 70% of tires produced at the firm’s two plants in Daejeon and Geumsan are for exports, the company said.

Soju maker Hite Jinro is carrying only 38% of normal supply of the Korean liquor, as outsourced truck drivers joined the protest.

The damage so far, however, appears to be limited. HMM Co., which operates a terminal in Busan under a joint venture with PSA International, said early Wednesday there have been no major disruptions. Busan Port Authority said it is blocking vehicles that the union is trying to push into the port area, and police are ensuring the smooth movement of vehicles.

The first large-scale strike under newly elected President Yoon Suk Yeol came as the truck drivers push the government to not abolish current rules that guarantee minimum wage for the drivers, amid rising fuel prices. Created in 2020, the three-year rule is set to expire this year.

The union is demanding that the government extend the scheme to all drivers of freight vehicles, who sometimes resort to overloading their trucks to keep up with the rising costs of living, the ITF said.

“It’s hard to resolve, especially under the new president who came from the conservative party that focuses on economic growth rather than social welfare,” said Kim Ki-Chan, a business administration professor at Catholic University of Korea in Seoul. “It may take several months for the government and the union to settle on the issue.”

When asked about the strike Tuesday, Yoon told reporters that he “will handle any illegal activities by workers or employers by the law,” without elaborating.

Police have arrested 25 people so far for blocking some facilities, the ITF spokeswoman said.

 

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