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South Korean truckers on strike are going after chips and slowing down port activity

Image: Reuters Berita 24 English -  South Korean truckers went on a wider and more aggressive strike on Friday, threatening to severely cut...


Image: Reuters


Berita 24 English - South Korean truckers went on a wider and more aggressive strike on Friday, threatening to severely cut deliveries of raw materials for semiconductors and petrochemical products.

As the strike against rising fuel prices moved into its fourth day, production at Hyundai Motor Co.'s biggest factory complex was cut in half on Thursday. Shipments for a number of companies, including POSCO, were also affected.

The flow of containers through ports has also slowed down a lot. A government official said that traffic at Busan port, which handles 80% of the country's container business, was only a third of what it usually is on Friday.

At the port of Incheon, it has dropped to 20% of normal levels, and since Tuesday, all container traffic has stopped at the port of Ulsan, which is the industrial hub where most of the strike action has taken place.

The transport ministry said that about 7,500 members of the Cargo Truckers Solidarity union, or about 35% of the group, are likely to go on strike on Friday. The government thinks that about 6% of the 420,000 truck drivers in the country are part of a union.

The union has said that many more people are on strike than the government says, and that many truckers who are not in the union are also refusing to work.

South Korea is a big supplier of semiconductors, smartphones, cars, batteries, and electronics. The latest strike adds to the uncertainty in global supply chains that has already been caused by China's strict COVID rules and Russia's invasion of Ukraine.

When one of his first big economic problems came up, the new President Yoon Suk-yeol took what he called a "neutral" position and said the government shouldn't get too involved.

Some people are worried about this because Yoon's words could make it harder for the government to find a solution.

"The government should look at what the union wants. They don't have to take all of them, but I think it would help if they thought about giving subsidies to truckers to help them deal with rising fuel prices "Shin Se-don, a professor of economics at Sookmyung Women's University, said the same thing.

The union said that a meeting with the government on Friday ended without an agreement and that they would meet again on Saturday.

HYUNDAI HINDERED

Share prices of big companies haven't changed much because people think the companies have enough stock to get through the strike for now.

Kim Gyeong-dong, an official with the truckers' union, said that the union ran out of money to pay for the strike on Thursday and that it was unlikely that the strike could go on for another 10 days.

Some companies, on the other hand, were looking to make new plans for what could go wrong.

"If the strike goes on next week, we'll have to rethink how we handle shipments," said an official at a major South Korean company that makes batteries for electric vehicles (EVs). The official didn't want to be named because the subject is sensitive.

Truckers plan to stop sending raw materials for Ulsan-made semiconductors, which is one of the new things they will do. A senior member of the truckers' union, Park Jeong-tae, told Reuters on Friday.

Chipmakers Samsung Electronics Co and SK Hynix declined to comment.

Park also said that the number of vehicles allowed into a large petrochemical complex in Ulsan has been cut to one-tenth of what it used to be, and truckers will tell non-union truckers not to go into the complex. The union also plans to strike harder at other petrochemical complexes across the country.

A Reuters reporter saw about 1,000 truckers protesting at the main Hyundai Motor building in Ulsan on Friday.

"There are some disruptions to our production due to the truckers strike, and we hope production would be normalised as soon as possible," a Hyundai spokesperson said.

Hyundai's plants in Ulsan usually make about 6,000 cars a day, like the high-margin Genesis SUV and Ioniq 5 EV.

The truckers, who are considered independent contractors in South Korea, want their pay to go up and for an emergency measure that guarantees freight rates to be kept. During the pandemic, the emergency measure was put in place. It will end in December.

Police said around 30 union members have been arrested so far.

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