South Korean Truckers End Strike After Port Wait Times Soar

South Korean truckers strike ends
Dwell times soared at Busan during the 8-day strike (file photo)

Published Jun 15, 2022 4:15 PM by The Maritime Executive

Unionized truck drivers returned to work Wednesday morning in South Korea after reaching agreements with the Ministry of Land, Infrastructure and Transport (MOLIT) to end their eight-day strike. Government officials and analysts are however citing significant harm to the South Korean economy and extensive backlogs at the ports which are expected to take time to resolve.

The drivers won their key point which was an extension of a minimum wage program instituted during the pandemic that was due to expire in December. The MOLIT agreed to present its findings on the program to parliament and to work with the lawmakers to make the program permanent. In addition, they also agreed to explore further fuel subsidies for the drivers and expanding the minimum wage program to cover more types of cargo. It currently only covers drivers moving containers and cement products.

The agreement came in the fifth round of negotiations between the ministry and union, which had been holding out despite increasing pressure to return to work. Prior to the latest negotiations, the transport minister warned that the government might be forced to step in and force drivers back to work. At the end of last week, members of the military had been assigned to begin moving containers and other manufactured goods to make space as items were piling up. The minister warned that he would consider jailing the drivers that did not return to work.

Shippers and the cargo companies reportedly opposed extending the minimum wage program. They said it was putting too much pressure and cost on cargo shippers. The Ministry of Trade, however, estimated that the strike was causing significant damage and warned that work needed to resume as the strike began to threaten semiconductor manufacturers, one of Korea’s most important industries. They had previously cited the manufacturing impact on the automobile, steel, petrochemical, and cement sectors putting the cost of the first week of the strike at over $1.2 billion.

Ports around South Korea also reported a significant fall in volumes during the strike. Logistics industry data analysts Project44 issued data on Tuesday illustrating the impact of the strike on the primary port at Busan. Project44 reported that import dwell times were up 258 percent last week while export dwell times were up 226 percent at Busan. Historically averaging a consistent 3.5 to 4 days, dwell times soared to 11.4 days on average for exports and 14.3 days for imports according to Project 44.

The Ministry of Trade reported overall daily volumes at South Korea’s ports dropped by more than half last week compared to the averages in May. The ministries committed to doing everything they could to help get the drivers back to work and to help reduce the backlogs that developed during the strike.