Value context and insight. lkm@koreatimes.co.kr
Truckers' strike lays bare vulnerabilities of Korea's logistics system
Cargo trucks leave POSCO in Pohang, Wednesday, hours after the unionized truckers reached an agreement to halt a strike that had continued for the past eight days. Korea Times file
By Lee Kyung-min
By Lee Kyung-min
Korea's logistics system is extremely vulnerable to unforeseen risks, as illustrated by an eight-day strike by unionized truckers under the Korean Confederation of Trade Union (KCTU) that ended up incurring about 2 trillion won ($1.5 billion) losses in economic activities, market watchers said Wednesday.
Some say the week-long walk-out dragged on due in part to inaction by the transport authorities seeking to dodge their responsibility for a set of thorny labor demands to the National Assembly.
Which of the two parties ― the government or the truckers ― is more at fault for the short-term disruption remains debatable. But the immense losses suffered by Korea's major exporters, mostly manufacturers, will not be recuperated by either.
Of graver concern is a lack of measures to counter the acute vulnerabilities of the supply chain and logistics system of the export-reliant economy, certain to be repeated whenever unionized workers threaten collective action.
Passing the buck
In the last-minute breakthrough announced late Tuesday, the Ministry of Land, Infrastructure and Transport said it had accepted key demands made by the truckers, adding that the complicated issue will be discussed further at the National Assembly. Among the demands were full, unconditional extension of the law put in place to guarantee a minimum wage for truckers to help prevent cargo overloading and sleep deprivation. The law took effect in 2020 but is set to expire Dec. 31.
The law is likely to be extended for three years. The ministry said truckers will be eligible for increased government subsidies in the event of an unexpected steep price jump in global key commodity prices.
Also accepted were demands for a complete exemption of criminal prosecution or investigation for those who engaged in the collective action, and greater government fuel tax benefits.
The sheer unreasonable asks aside, the agreement had no mention of how to increase efforts to avoid the taxing method of negotiation thereby limiting the scarring of the economy, according to Lee In-ho, former chairman of Korea Economic Association.
“The unionized workers were ready to hold out until their demands were met, and the government had to make this issue go away as quickly as possible,” he said.
“Striking workers by definition have little regard for the far-reaching consequences of their actions on the economy in the broader context, a reason why similar incidents of this sort are bound to occur, I'm afraid. The responsibilities to seek preventive measures will now fall on the policymakers, which I doubt would make any immediate progress.”