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A mass strike by South Korean truck drivers has disrupted logistics across the world’s 10th-largest economy, crippling cement, steel and car producers.
Thousands of unionised truckers launched a second nationwide strike on Thursday threatening to paralyse critical supply chains as they seek better pay and working conditions.
Several key industries were hit on Friday as companies from Posco to Hyundai were unable to transport their daily outputs. Hyundai Steel said it could not transport the daily shipment of 8,000 tons from its factories and its Pohang factory, in the country’s southeast, while compatriot steel giant Posco is already looking into sea or rail routes to deliver the supplies.
The country’s cement industry association said factories couldn’t ship most of the daily supply of 200,000 tons on Thursday as bulk cement tanker drivers joined the strike. The lobby group estimated output loss at about $14.3m. Operations at construction sites could be suspended as early as early next week if the cement is not delivered in time, ready-mix cement producers warned.
Meanwhile, workers at Hyundai Motor’s Ulsan factory started to drive about 1,000 new cars to customers directly on Friday, after delivering only about 50 units on Thursday. Hyundai Glovis also started delivering some Kia cars directly from Gwangju plant.
The organisers warned the strike could stop oil supplies and transport as workers are set to rally and block ports, petrochemical and industrial sites, and logistics hubs around the country.
The unionised workers, who make up around 6% of the country’s truck drivers, are demanding the government extend and expand a system calculating minimum wages based on operating costs that is due to expire by the end of the year. The truckers are calling for the so-called safe rates, which currently apply to the haulage of bulk cement and containers, to be made permanent and coverage extended to all vehicle and freight types.
Bongju Lee, president of the Korean Public Service and Transport Workers’ Union (KPTU-TruckSol), said: “The government is backtracking on its promise to the determent of workers and public safety. We are prepared to strike until that changes. Legislation to make safe rates permanent and expand coverage must pass in the National Assembly. It’s as simple as that.”
An eight-day strike by truckers in June over the same issue was estimated to have cost the South Korean economy $1.2bn and sent shockwaves through global supply chains. The government then agreed to continue the system and actively discuss extending its coverage to more trucks, but has since retracted this position, according to the International Transport Workers’ Federation (ITF).
Unions estimated about 25,000 people were joining the strike. The transport ministry said about 7,700 people rallied for the strike on Friday in 164 locations nationwide, down from 9,600 people on Thursday.
The ITF and 66 affiliated unions from around the world signed an open letter condemning the South Korean government and ruling People Power Party (PPP) for “breaking their promises to workers and failing to prevent a strike that will cause enormous short-term damage to the Korean economy, to critical national and global supply chains, and to Korea’s global reputation.”
South Korean president Yoon Suk-yeol has warned the government might step in to break up the industrial action, describing it as an illegal and unacceptable move to take the national supply chain hostage during an economic crisis.
“The public will not tolerate taking the logistics system hostage in the face of a national crisis,” Yoon said on Facebook, adding: “If the irresponsible denial of transport continues, the government will have no choice but to review a number of measures, including a work start order.”