South Korea's truckers reach deal with government, end strike
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SEOUL • Striking truck drivers in South Korea reached an agreement with the government late yesterday, ending an eight-day strike that added to the strain on global supply chains.
The truck drivers will return to work immediately, after agreeing to an extension of the freight rate system that guarantees minimum wages, according to a statement from the Cargo Truckers Solidarity Union of the Korean Public Service and Transport Workers Union.
Under the agreement, the Transport Ministry will provide subsidies to alleviate pressure on surging fuel costs, according to the statement.
The union was demanding the extension of the freight rate system to help drivers cope with rising fuel prices.
The system was introduced in 2020 and was to help prevent dangerous driving practices, such as cargo overload, and offer a guarantee of minimum rates to truckers. It was due to expire this year.
The strike, which started on June 7, had roiled industries amid fears of higher costs and wider upheaval to global supply chains after Covid-19 lockdowns in China and Russia's invasion of Ukraine.
The Ministry of Trade, Industry and Energy estimated this week that key industries saw production disruptions worth about 1.6 trillion won (S$1.7 billion).
Deliveries of cars, petrochemical products, steel and materials for semiconductor chips had been suspended or delayed, and concerns grew that a prolonged strike would force bigger production shutdowns and even put the nation's energy security at risk.
South Korea's top steelmaker, Posco, suspended output at its four wire-rod factories and a cold-rolled steel plant after the strike exhausted warehouse space. Petrochemical producers also saw warehouses fill up, as they were unable to deliver raw materials used to make everything from clothing to cars.
The daily volume of container boxes transported to and from the nation's 12 ports dropped 53 per cent yesterday, compared with the average for last month.
Inbound and outbound volumes at Busan, the world's seventh-busiest port, were about half their usual amount.
The crippling strike was seen as an early test for new President Yoon Suk-yeol, who vowed to deal with labour disputes strictly.
South Korea is the world's largest memory chip exporter and home to global chip powerhouse Samsung Electronics, as well as large car companies, including Kia and Hyundai Motors.
But the truckers had said they were desperate due to sharp rises in fuel prices - with inflation at its highest level in over a decade.
At a Cabinet meeting earlier yesterday, Prime Minister Han Duck-soo called for an end to the strikes, saying they could deliver "a very difficult blow" to the country's export-driven economy. "It is causing a major setback to the logistics network," he said.
The government has come under fire for a "hostile" policy towards workers, which critics say is fuelling tensions.
1.6 trillion won
Estimated value of production disruptions (S$1.7 billion) South Korea's key industries suffered owing to the trucker strike, according to the Ministry of Trade, Industry and Energy.
53%
Fall in the daily volume of container boxes transported to and from the country's 12 ports yesterday, compared with the average for last month.
On the campaign trail, Mr Yoon - a political novice - had vowed to be strict on labour disputes, and indicated he was more pro-business on issues such as minimum working hours.
At least 23 members of the Cargo Truckers Solidarity Union had been arrested for illegal activities at the protests that included interfering with normal vehicle operations, according to the Transport Ministry.
BLOOMBERG, AGENCE FRANCE-PRESSE
