Korea’s supply chain faces new disruption as truckers threaten to strike

[Photo by Han Joo-hyung]

South Korea could face another bottleneck in its supply chain as truckers are set to go on a nationwide strike Thursday in the second collective action since June when their week-long strike caused a backlog of containers at ports and a shortage of supplies for retailers.

The Cargo Truckers Solidarity division of the Korean Public Service and Transport Workers Union said it will go on strike as of 12 a.m. tomorrow indefinitely, demanding the government to permanently provide a guarantee of minimum pay for carrying cargo for containers and cement sector. The truckers are also demanding the expansion of this guarantee to other sectors such as steel and tank vehicles.

The planned strike comes after the union rejected a proposal from Korea’s ruling People Power Party and the government to extend the guarantee by three years to 2025 without expanding minimum wages to other sectors.

Another disruption in the supply chain in five months can also be blamed on the government for dilly-dallying on coming up with a lasting solution. In June, the government and the truckers’ union ended the weeklong strike that caused almost 2 trillion won ($1.5 billion) losses after the government came up with a suggestion that the two parties will continue with the minimum pay guarantee and discuss ways to make it available to more sectors. But no progress has been made since.

Renewed strike by truckers can be more damaging to the the country’s supply chain than the previous disruption as they are to be joined by rail union from Dec. 2.

The Korean Public Service and Transport Workers Union has warned of walkout from Thursday starting with the Incheon airport. Chain strikes are in the making from the public sector’s non-regular workers union to Seoul Transportation Corp. union and three union groups at Hyundai Heavy Industries Co.

Korea’s six economic organization, including the Korea Chamber of Commerce and Industry, the Korea International Trade Association and the Korea Employers Federation, have issued statements urging the workers to refrain from joint actions at a time when the economy faces serious challenges.

In the statement, they said the minimum payment guarantee system much be abolished immediately because it weakens Korea’s export competitiveness.