Builders on edge over looming construction site shutdowns as truckers' strike continues

The Korea Times

The Korea Times

Business

Sat, September 30, 2023 | 15:42

Companies

Builders on edge over looming construction site shutdowns as truckers' strike continues

Posted : 2022-11-25 17:16

Updated : 2022-11-27 16:00

Seen is the reconstruction site of Dunchon Jugong Apartment complex in southeastern Seoul, August 12. Newsis

By Baek Byung-yeul

Construction companies are on the verge of halting their construction activities due to the deepening disruption to the supply of construction materials, as striking truckers under the Korea Confederation of Trade Unions (KCTU) refuse to work, according to companies and the industry ministry, Friday.

The companies said there are no major disruptions yet to their construction sites as the cargo truck workers' strike was announced in advance, but things could deteriorate fast if the ongoing walkout, which began Thursday nationwide, is left to continue.

"Regarding the strike by cargo truck workers, there are no major problems at our sites so far. There may be delays in the supply of construction materials at some of our sites, but the construction process can be fully recovered at the moment," a spokesman of Hyundai E&C said.

"However, if the strike is prolonged, delays in construction activities are inevitable. Also, the matter is not only related to the company's site, but also most sites nationwide. Thus, we have to carefully take a look at how the negotiation goes between the Ministry of Land, Infrastructure and Transport and the unionized workers," he added.

An official in the construction industry added, on condition of anonymity, that "the industry could be severely hit by the strike because ready-mixed concrete cannot be stored for a long time, so it must be supplied frequently."

Unionized truckers under the Korean Confederation of Trade Unions (KCTU) hold a rally at the Uiwang Inland Container Depot in Gyeonggi Province, Thursday, asking the government to extend the Safe Trucking Freight Rates System that guarantees minimum freight rates for truck drivers. Yonhap

On Thursday, 25,000 union members nationwide began holding their second rally of this year after the one in June, which lasted about a week and incurred about 2 trillion won ($1.5 billion) in losses in economic activity.

The truckers said they will block the entryways to major logistics hubs in key regions, including Seoul, Busan and Gwangyang. They will also engage in sit-ins demanding the government to extend the freight rate system that guarantees them basic wages.

On Tuesday, the government decided on a three-year extension of a disputed law put in place to guarantee a minimum wage for truckers to help prevent the issue of cargo overloading and sleep deprivation. The law took effect in 2020 and was set to expire on Dec. 31 of this year, however, the government then extended it for three more years. However, the union has since refused it, saying it should be permanent and not just until 2025.

The Ministry of Trade, Industry and Energy said that it checked the impact of the strike by industry and that it believes that product shipments are mainly disrupted in the cement and steel industries, while other industries are not significantly affected.

"In particular, it is feared that disruptions at construction sites will become visible in a short period of time because the inventory holding period for ready-mixed concrete is usually about only two days," the ministry said.

In response, the ministry set up an emergency taskforce consisting of industry officials and related government departments in steel, automobile, cement, shipbuilding, petrochemical, oil refining and electricity and held its first meeting on Thursday.

The ministry added that it intensively inspected the preparation situation for each industry, such as the early shipment of products; the expansion of the loading spaces inside and outside factories and the securing of alternative transportation methods.

baekby@koreatimes.co.kr