Park Jae-hyuk is a seasoned journalist who has provided comprehensive coverage of South Korea's corporate dynamics, economic policies, industry challenges and the global positioning of Korean companies. Based on the articles he has written since joining The Korea Times in 2016, his investigative approach has helped readers understand corporate governance, economic trends and business strategies shaping South Korea’s economy.
Nationwide cargo truckers' strike heightens woes for businesses
Members of the Cargo Truckers Solidarity demonstrate during a general strike declaration ceremony at an inland container depot in Uiwang, Gyeonggi Province, Tuesday. Yonhap
By Park Jae-hyuk
Samsung, SK, Hyundai Motor, LG brace for fallout
By Park Jae-hyuk
An indefinite general strike that began at midnight on Tuesday by unionized cargo truck drivers is feared to deal a severe blow to Korean businesses, according to company officials Tuesday.
Until now, the strike has mostly affected companies dealing with raw materials. However, Samsung Electronics, SK hynix, Hyundai Motor and LG Electronics have also been mentioned as potential victims, as the major conglomerates could face setbacks in securing essential components and exporting their products if the strike ends up becoming protracted.
Both Samsung and LG have used cargo trucks to transport refrigerators, washing machines, televisions and other large electronic appliances from their factories to warehouses nationwide.
Although they have transported their products in advance to brace for the general strike, the manufacturers have been concerned about the possible fallout from the protest.
“We have kept a close watch on how the situation will unfold,” a Samsung Electronics official said.
Last month, the Cargo Truckers Solidarity decided to go on a strike to protest the planned annulment of the “Safe Trucking Freight Rates System” designed to prevent dangerous driving by guaranteeing minimum freight rates for truck drivers.
The union under the hawkish Korean Confederation of Trade Unions has claimed that the system is necessary, saying that surging diesel prices threaten their very survival.
However, their collective action, which follows a strike last November, has caused freight bottlenecks, worsening the ongoing supply chain crisis.
POSCO estimated that its steel mill in Pohang, North Gyeongsang Province, will need to delay the transportation of 20,000 tons of products every day, among its daily transport volume of 49,000 tons.
Hyundai Steel's plant in the city also halted the transportation of 9,000 tons of products on the day truckers went on strike.
“We will come up with countermeasures to minimize damage to our customers,” a POSCO official said.
Flags of cargo truckers' unions hang in front of POSCO headquarters in Pohang, North Gyeongsang Province, Tuesday. Yonhap
Construction sites nationwide are also on the verge of seeing their operations grind to a halt, due to the suspended transportation of cement.
According to the Korea Cement Association, unionized bulk cement trailer drivers have blocked non-unionized drivers from entering cement production facilities in the eastern region and storage facilities near Seoul.
Considering the shortage of cement and ready-mixed concrete in the wake of the global supply chain crisis and Russia's invasion of Ukraine, builders have expressed concerns about possible delays in their projects during peak season before the summer monsoons begin.
Retailers have already suffered difficulties, even before the truckers' union officially began striking.
Since March, truck drivers have refused to transport soju from HiteJinro's factories in Icheon, Gyeonggi Province, and Cheongju, North Chungcheong Province, to convenience stores nationwide.
As a result, the headquarters of CU, 7-eleven and Ministop have supplied “Chamisul” and “Jinro” soju to their franchisees in limited numbers.
GS25, which has yet to take any measures, also said it is watching the situation closely.
Refiners and petrochemical companies have been concerned about setbacks in receiving raw materials, after truckers blocked their factories and major ports nationwide.
Although the companies have secured a certain volume of raw materials in advance, their inventory could begin to dwindle starting next week, according to industry officials.