Ports in South Korea and Germany Hit by Strikes
Ports in both Germany and South Korea were impacted by strikes as workers respond to the increasing pressures of global inflation and two years of hardships during the pandemic. While the strike by port workers in Germany was not expected to last, but instead was a “warning” by the union during protracted labor negotiations, a strike by truck drivers in South Korea is bringing port operations to a halt and quickly impacting the major industrial and manufacturing operations. All of this comes as attention is also focused on the labor negotiations for the U.S. West Coast longshore union.
The South Korean strike is being led by unionized truck drivers who literally have decided to sit down in the streets and stop their trucks. The strike entered its fourth day on Friday intensifying. Estimates vary widely on how many truck drivers are involved in the job action with some reports setting it as high as 20,000. Korea’s Transport Ministry said as many as 7,500 drivers, which would be about a third of the Cargo Truckers union, were expected to be on strike Friday. Official government estimates report that just six percent of the country’s more than 400,000 drivers are unionized, but observers are pointing out that most truck drivers are self-employed and even the non-union drivers are staying off the job fearing retribution from their colleagues.
In the face of skyrocketing fuel prices, the drivers are demanding that minimum wage guarantees introduced two years ago during the pandemic be extended beyond a December 31 expiration. They are also demanding work rules that prevent overwork and extended hours that they say lead to unsafe driving.
The strike is seen as a threat to the government of the newly elected president of South Korea, Yoon Suk-yeol. President Yoon took office just last month and so far has said he prefers to stay out of the strike calling on the unions and management to resolve their differences. Police, so far, are only intervening to stop criminal activity. As for Friday, they reported that there had been less than 100 arrests across the country.
Activity at South Korea’s major ports has come to a halt. Busan, which typically handles 80 percent of the country’s container traffic, reported that just 5,400 TEU moved through the port. This was down by three-quarters from a typical day. Capacity at the port’s container yards is already down five percent in May with port officials saying the yards were nearly three-quarters full before the strike began.
Other ports across South Korea are reporting a similar impact on operations. Ulsan, which is a major industrial hub, suspended all operations on Tuesday. Incheon reports that it is operating at about 20 percent of normal capacity.
Major industrial companies are also quickly reporting shortages of materials and an inability to move their goods. Steel, auto, and cemetery factories suspended shipments, but Kia Motors without car carriers is now struggling to find storage for its cars. They asked the government to suspend rules so that they could move cars away from the factory. As the strike is intensifying South Korea’s semiconductor industry is now reporting an inability to receive raw materials raising concerns for semiconductors which are already in short supply worldwide.
South Korea’s largest steel manufacturer, POSCO also warned that it would have to delay shipments of steel and semi-finished products. They are the leading supplier to South Korea’s shipyards with fears that the shortages will quickly impact operations at the yards that were already running at full production levels to keep up with orders.
Similarly, in Germany on Thursday the union representing dockworkers at Hamburg, Europe’s third busiest port, as well as Bremerhaven, Wilhelmshaven, Bremen, and elsewhere staged a strike that they called a warning to employers. Germany has not had a major port strike in decades but up to three-quarters of port employees are unionized. The union is demanding compensation for inflation with reports saying their demand is for as much as a 14 percent increase over one year while employers are offering seven percent over two years.
Talks were continuing in Germany with the workers expected to remain on the job after the brief stoppage. German businesses, however, point out that almost all of the country's imports and exports move through the ports. Overland transport by rail and truck is limited.
In the United States, the longshore labor contract covering the West Coast ports is due to expire in three weeks. The sides are reported to be far apart on issues of automation. Wages, of course, are an issue and there are also reports that the terminals are now proposing to extend morning gate hours to provide more access for truckers. Earlier this week several trade associations called on President Biden and the administration to be more involved in the negotiations. The National Retail Federation also called on both sides to stay at the table and talk warning of the consequences of further disruptions to the U.S. supply chain.