South Korea truckers go on strike again, supply chain at risk

A member of the Cargo Truckers Solidarity union stands next to a LPG lorry in Ulsan, South Korea, June 10, 2022. REUTERS/Byungwook Kim/File photo

UIWANG, Gyeonggi Province, South Korea  -Unionized truckers in South Korea kicked off their second major strike in less than six months on Thursday, threatening to disrupt manufacturing and fuel supplies for industries from autos to petrochemicals in the world’s 10th-largest economy.

With fuel costs soaring, the truckers are calling on the government to make permanent a minimum-pay system known as the ‘Safe Freight Rate’ that is due to expire by the end of the year, and to expand benefits for truckers in other industries, including oil tankers.

The government has said it will extend the scheme for three years but rejected other union demands. In June, an eight-day strike by truckers delayed cargo shipments across Asia’s fourth-largest economy, costing more than $1.2 billion in lost output and unmet deliveries.

Lead organiser the Cargo Truckers Solidarity Union (CTSU) has warned the strike could stop oil supplies at major refineries and transport at major ports and industrial plants.

“We have no choice but to stop all logistics in Korea,” said Lee Bong-ju, head of the union, on Thursday.

Earlier this week, Transport Minister Won Hee-ryong said the Safe Freight Rate system had not been proven to improve the safety of truckers but to only raise their incomes, a reason why the government has refused to expand the scope of the scheme.

“The government and the ruling party misled and openly defended capital, saying that truckers’ income levels were not low and that if the ‘Safe Freight Rate’ system were expanded, prices could rise due to increased logistics costs,” Lee said.

The union is asking the government to ensure big businesses are held accountable if they violate the minimum wages rule.

Industry giants including Hyundai Motor and steelmaker POSCO were forced to cut output by the June strike, and POSCO has warned that fresh action could slow repair works at a major plant hit by floods this summer.

“If the cargo union strike continues, it will put too much of a burden on not only major industries, but also people’s livelihoods and the national economy as a whole,” said Prime Minister Han Duck-soo on Thursday.

The union kicked off 16 rallies across the country on Thursday morning, including at a port in Ulsan that houses Hyundai Motor’s manufacturing plant.

Striking truckers were seen by a Reuters’ eyewitness eating cup noodles and drinking soju, a Korean distilled spirit traditionally made from rice, in the morning before the rally in transport hub Uiwang, Gyeonggi province, where union officials said about a thousand truckers were gathering.

The truckers chanted, “We stop, the world will stop!” and “Let’s stop driving to change the world!”.

At Busan, South Korea’s biggest port, police officers and buses were seen lined up along key routes.

The government is considering deploying military trucks for urgent transport, and securing more storage space in case cargoes pile up. The Korea Oil Station Association is asking gas station owners to secure enough inventory ahead of the strike, an association official said earlier.

The union has said almost all of CTSU’s 25,000 members, about 6 percent of the country’s truck drivers, will take part in the strike, joined by an unspecified number of non-union members.