SEOUL - Thousands of cargo truck drivers in South Korea on Monday (June 13) went on strike for the seventh day running, forcing the government to deploy military trucks to move containers out of key ports including Busan.
The strike, which saw members of a trucker’s union demanding better wages, has disrupted the logistics network and caused an estimated loss of nearly 1.6 trillion won (S$1.7 billion) so far in major industries, such as carmaking, steel and cement.
President Yoon Suk-yeol warned on Monday that the damage would increase in the week ahead and urged the government to “prepare various alternatives” to mitigate the impact on the economy.
Negotiations between the Cargo Truckers Solidarity union, which has more than 20,000 members, and the government have been unsuccessful so far.
The truckers first walked out on June 7 to demand more pay to offset rising fuel costs and an extension of a government support system that guarantees a minimum payment for them.
Due to end on Dec 31 after a three-year run, the system is aimed at giving truckers fair wages to help ease the problem of speeding and overworking, but companies said it caused a surge in freight fees.
The union said on Monday that it tried to find a solution through meetings with the Ministry of Land, Infrastructure and Transport and came close to reaching a tentative agreement on Sunday. But the negotiations eventually fell through due to objections from the ruling People Power Party.
The ministry said negotiations have been suspended due to disagreements but did not give details.
There are more than 400,000 self-employed truckers in the country, who play a key role in transporting containers filled with products ranging from cars to batteries, semiconductors and cement.
As at Monday, some 6,600 truckers had joined the nationwide walkout - up from 4,100 the previous day, according to ministry data.
If it continues indefinitely, the strike is feared to affect global supply chains reliant on South Korean exports and deal a heavy blow to the Yoon administration that just took office in early May.
The President has already drawn criticism for his “hostile” policies towards workers.
He has said he would respond to any illegal or unjust action, whether by workers or employers, “in accordance with the law and principles” and that no violence will be tolerated. He has also insisted that the government should not intervene in disputes between labour and management.
“Only when the government sticks to the law and principles and remains neutral, do I believe labour and management will be able to build the capacity to freely resolve their issues on their own,” Mr Yoon told reporters last Friday.
“I have a lot of doubts about whether the government’s position or intervention until now was desirable for the establishment of labour-management relations and culture.”
The strike has already caused the steel industry nearly 700 billion won due to shipment delays, said the Ministry of Trade, Industry and Energy. Petrochemical companies lost around 500 billion won, while the damage to carmakers was worth over 250 billion won.
At least 15 companies have had to suspend factory operations, according to the Korea International Trade Association. It has received 160 complaints on production disruptions and shipment delays.
With inventory piling up at major ports, the government has had to dispatch 100 military trucks to move containers to nearby locations to free up storage space.
First Vice-Minister of Trade, Industry and Energy Jang Young-jin urged a quick resolution to the strike.
“Our economy and the overall industry are expected to suffer huge losses if logistics disruptions continue at a time when we are facing multiple challenges such as global supply chains disruptions and rising raw materials prices,” he said.
