SEOUL– Thousands of South Korean truckers went on strike for a seventh day on Monday with no end in sight, disrupting production and shipping in key manufacturing industries.
In the latest industrial impact of the truckers’ strike, South Korea’s leading steelmaker POSCO on Monday halted operations at some of its plants in the country due to lack of space to store finished products.
POSCO said it “inevitably” suspended the operation of all of its four wire rod plants and the No. 2 cold-rolled steel plant from 7:00 a.m. on Monday.
The company expects production losses of about 8,000 tons of wire rods and 4,500 tons of cold-rolled steel per day if the suspension continues at the plants.
A prolonged walkout could also result in disrupted production in the hot-rolled coil and thick steel plate plants in the coming days unless the walkout is resolved, POSCO said.
The company expressed concerns that there might be a suspension of the blast furnace in the main integrated steel mill in Pohang, 374 kilometers south of Seoul, in the worst case scenario, it said.
Hyundai Steel Co., the country’s second-biggest steelmaker, has also had difficulty shipping some of its finished products due to the strike.
The truckers’ strike is deepening logistic disruptions and delays nationwide, as their negotiations with the government for a resolution fell through, officials said.
Members of the 22,000-strong Cargo Truckers Solidarity, under the wing of the Korea Confederation of Trade Unions, have been on a general strike since June 7, demanding the government extend a freight rate system guaranteeing basic wages for truck drivers to cope with rising fuel costs.
The walkout caused widespread disruptions in the country’s logistics networks, with major sectors, including auto, steel and cement, experiencing losses in output and exports worth an estimated 1.6 trillion won (US$1.24 billion) over the past seven days, according to the industry ministry.
As of early Monday, some 6,600 members, or 30 percent, of the truckers’ union joined the walkout nationwide, the transport ministry said.
The union claimed that during their latest round of talks Sunday, the two sides went as far as reaching a tentative agreement pledging “active” efforts to help extend and upgrade the contentious freight rate system.
But the talks fell apart just ahead of the final agreement due to objections from the ruling People Power Party, the union claimed, vowing to continue the strike and “fight more powerfully.”
The union is demanding an extension of the Safe Trucking Freight Rates System designed to prevent dangerous driving and guarantee minimum freight rates for truck drivers. The system, introduced for a three-year run in 2020, is scheduled to end Dec. 31.
The ministry said its dialogue with the union is suspended due to unspecified disagreements within the government over what has been discussed between the ministry and the union.
The ministry said the union claims to have reached a deal with the ministry, but it was a working-level discussion, not a final deal.
“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,” First Vice Industry Minister Jang Young-jin said, appealing for a swift resolution to end the strike.
The auto industry has suffered damages worth 257.1 billion won as the strike has hindered the shipment of car parts and caused output losses of around 5,400 vehicles, the industry ministry said.
Hyundai Motor Co., the country’s biggest carmaker, said the trucker strike is affecting vehicle production at its five plants in Ulsan, about 410 km southeast of Seoul. In the five Ulsan plants, Hyundai produces the Genesis GV80 SUV and the Hyundai IONIQ 5 all-electric model.
Steelmakers, including POSCO, have seen some 697.5 billion won of losses so far.
Petrochemical and cement companies have difficulty in delivering finished products due to the strike.
The Korea Petrochemical Industry Association said some petrochemical firms are already suffering damages due to disruptions in shipping and may have to suspend operations at their plants if the strike continues.
Most cement companies were forced to reduce the operation of their factories as their silos for the storage of cement were nearly full amid logistic disruptions, the ministry said, adding that greater output losses are expected this week.
On Sunday, the amount of shipping containers moved in and out of the Port of Busan, the biggest port in South Korea, dived to about one-fourth of the level seen a month earlier.
The corresponding figure at the Port of Incheon, another major port, also fell by up to 20 percent from the normal level.
The Korea International Trade Association said it has received 160 complaints from firms over logistics delays and production disruptions.
Among them, 105 cases were about problems in outbound shipments and 25 were about difficulties in securing raw materials. Fifteen companies said the truckers’ strike has led to the suspension of their plants.
Police said a total of 44 union members were detained over business obstruction and other strike-related irregularities over the week, and two of them have since been formally arrested.
“Police will deal sternly with any illegal acts committed at the scene, such as the obstruction of official duties by public servants and threats to non-striking workers,” Nam Koo-jun, investigation chief of the National Police Agency, said.
Source: Yonhap News Agency