South Korea’s President Warns of Action, as Truck Strike Continues

Seoul: Yoon Suk-yeol President of South Korea warned the government might step in to break up a nationwide strike by truckers, describing it as an illegal and unacceptable move to take the national supply chain hostage during an economic crisis.

On Thursday, thousands of unionized truckers sent off their second major strike in less than six months seeking better pay and working conditions. The action is already disrupting supply chains across the world’s 10th biggest economy, affecting automakers, and cement and steel producers.

Association authorities told the media there were no ongoing negotiations or dialogue with the government. The nation’s transport ministry said it requested dialogue with the union on Thursday, but the parties have yet to agree on a date. Union officials estimated about 25,000 people were participating in the strike, out of about 420,000 total transport workers in South Korea. The transport ministry said about 6,700 people attended on Friday in about 160 locations nationwide, down from 9,600 people on Thursday.

“The public will not tolerate taking the logistics system hostage in the face of a national crisis,” Yoon said in a Facebook message late on Thursday, noting that exports were key to overcoming economic instability and financial market volatility.

“If the irresponsible denial of transport continues, the government will have no choice but to review several measures, including a work start order.”

According to South Korean law, during a serious disturbance to transportation, the government may issue an order to force transport workers back to their jobs. Failure to comply is punishable by up to three years of jail, or a fine of up to 30 million won ($22,550). The strike comes after South Korea saw October exports fall the most in 26 months as its trade imbalance persisted for a seventh month, underlining the slowdown in its export-driven economy.

Amid the economic gloom, Yoon’s approval rating stayed mostly flat for the fifth week at 30%, according to Gallup Korea on Friday, although his focus on economic affairs received a positive response. Outside the gate of the container depot in the transport hub Uiwang, dozens of unionized truckers camped and stayed overnight in white tents patrolled by police, though the strike has so far been peaceful.

“We are going to pour everything, resources, and money, and execute every strategy we have,” said Lee Young-jo, director-general at the Seoul metropolitan chapter of the Cargo Truckers Solidarity Union (CTSU).

Lee said apart from existing funds, the union will collect emergency funds among its members if the strike is prolonged. “We are desperate, but the government and politicians are calculating their political gains and not sincerely hearing us,” he said.

Lee said that unlike the previous walkout in June, which focused on disrupting the transportation of containers, cement, and cars, the union planned to expand its targets to include disrupting groceries and fuel supplies. Union chief Lee Bong-ju said the truckers had no choice but to strike after the government stalled talks.

“The Yoon Suk-yeol government is threatening a hard-line response without any efforts to stop the strike,” he told reporters on Thursday.

On the first day of the strike, the Korea International Trade Association (KITA) received 19 reports of disrupted logistics. These included the inability to bring in raw materials, high logistics costs and fines due to delayed deliveries, and loss of business with overseas buyers.

In one instance, raw materials for a chemical company were delivered under police protection after a transport vehicle was blocked by truckers from entering a factory, KITA said.

By 5 pm, container traffic at the ports had dropped to 28% of normal levels. (0800 GMT) on Friday, the transport ministry said, down 49% of normal levels in the morning. The cement industry has suffered an estimated 19 billion won ($14.26 million) in production losses after the strike reduced shipments to less than 10,000 tonnes, lobby group Korea Cement Association said on Thursday.

This is compared to South Korea’s cement demand of 200,000 tonnes per day in the peak season between September and early December. There is a danger of running out of construction materials at construction sites after the weekend. The industries ministry said that the steel sector also saw a drop in shipments on Thursday. POSCO (005490. KS), the country’s biggest steelmaker, declined to comment on the limit.

Meanwhile, workers at Hyundai Motor’s (005380.KS) Ulsan factory are expected to drive about 1,000 new cars to customers directly on Friday, after delivering about 50 cars on Thursday, a representative of a separate union at the factory told the media. So far there was no impact on auto output, the official said.

Drivers recruited by Hyundai Motor’s logistics affiliate Hyundai Glovis (086280. KS) began delivering some Kia Corp (000270. KS) cars directly from Kia’s Gwangju plant to customers.