Yi Whan-woo is a Korea Times journalist primarily covering finance. He writes in-depth articles on macroeconomy and financial markets and previously covered sports, politics, diplomacy and inter-Korean affairs, among others. Feel free to contact him at yistory@koreatimes.co.kr.
Cargo truckers' strike feared to add fuel to inflation
Cargo trucks are parked at a freight station in Uiwang, Gyeonggi Province, on the first day of a general strike by unionized cargo truckers, Tuesday. Yonhap
By Yi Whan-woo
By Yi Whan-woo
A general strike staged by unionized cargo truckers is fueling concerns of worsening soaring inflation and aggravating supply chains in the country.
The strike aims at extending the Safe Trucking Freight Rates System, which was introduced in 2020 for a three-year run. It ensures minimum freight rates and a favorable working environment for truck drivers to prevent overloading and speeding.
The unionized members of Cargo Truckers Solidarity are demanding an extension of the system, arguing that high fuel costs will threaten their survival if the system expires on Dec. 31 as scheduled.
But freight companies and manufacturers disagree.
They say minimum freight rates increased seven times since 2021 and that production costs will rise as long as the disputed system is sustained.
In particular, minimum freight rates for shipping distances of 50 kilometers or shorter increased up to 32.2 percent between 2020 and 2021, according to the Korea International Trade Association data.
Under the circumstance, the government is on alert to prevent bottlenecks in supply chains after the general strike began on 12 a.m., Tuesday.
The Ministry of Land, Infrastructure and Transport asked for cooperation from relevant government bodies while coming up with an emergency plan on logistics in Busan and other major port cities.
Economist Lee In-chul said the transportation of raw materials is mostly reliant on cargo trucks and that the strike may “seriously hurt backbone industries and deal a blow to the country's exports.”
He pointed out monthly inflation grew 5.4 percent in May ― the fastest pace in nearly 14 years ― and that 69 out of 73 processed foods, such as ramen, saw an increase in their respective prices.
He added that the recent drought, coupled with the strike, can disrupt food supply and push consumer prices upward.
Citizens' Coalition for Economic Justice, a Seoul-headquartered civic group, expressed concerns.
“Whether the system lasts in favor of the unionists or expires in favor of the corporate sector in general, the strike may deepen inflation although we value benefits that the system has brought to society,” the civic group said.
The ruling People Power Party called on the unionists to end the strike immediately, saying, “It will aggravate supply chains, affect inflation and add woes to people's lives.”
Businesses echoed a similar view.
For instance, Korea Enterprises Federation, a major business lobby group, criticized Cargo Truckers Solidarity for “holding the nation's economy and logistics network as hostages to unilaterally accomplish their demand.”