Capital Region Ready-Mix Concrete SMEs "15% Increase in Transportation Costs Is Excessive"

Representatives of ready-mixed concrete manufacturers located in the metropolitan area and other industry officials held an emergency press conference on the 29th at the Korea Federation of Small and Medium Business in Yeouido, Seoul, expressing their opposition to the demands for increased transportation fees by ready-mixed concrete transport operators.

[Asia Economy Reporter Kim Daeseop] Ready-mixed concrete manufacturers located in the Seoul metropolitan area held an emergency press conference on the 29th at the Korea Federation of Small and Medium Business in Yeouido, Seoul, to express difficulties regarding the increase in transportation costs.

On this day, the metropolitan area ready-mixed concrete companies stated, "Recently, ready-mixed concrete transport operators in the metropolitan area have demanded a 15% increase in transportation fees without considering the economic situation caused by the construction market downturn and the spread of COVID-19 infections. They have warned that if this is not accepted by June 30, they will collectively refuse ready-mixed concrete transportation starting July 1."

According to the industry, there are 137 ready-mixed concrete manufacturers operating in Seoul and the metropolitan area. The 137 ready-mixed concrete manufacturers located in the metropolitan area claimed that the transport operators are demanding excessive transportation fee increases and expressed their opposition.

Jung Hayoon, Executive Director of the Seoul Gyeongin Ready-mixed Concrete Industrial Cooperative, said, "Currently, under the 'Construction Machinery Supply and Demand Adjustment System' according to the Construction Machinery Management Act, the registration of new commercial ready-mixed concrete trucks has been banned for 11 years since 2009. As vehicles are aging and transport operators are also aging, there is concern that safety accidents could lead to major incidents. Meanwhile, transport operators are accelerating collective actions to maintain their vested interests."

Ready-mixed concrete transport operators are individual business owners who directly contract transportation with ready-mixed concrete manufacturers. So far, transportation fees have been increased by about 5-6% annually, paying an average of approximately 60 million KRW per year in transportation fees. In addition to transportation fees, they fully support fuel costs and provide meal allowances. The metropolitan ready-mixed concrete manufacturers claim that they have made significant efforts to preserve the income of transport operators despite decreases in sales and operating rates.

According to metropolitan ready-mixed concrete companies, the current average transportation fee per one trip (transporting one load of ready-mixed concrete) for transport operators is paid at 46,500 KRW. On a monthly basis, assuming five trips per day for 22 days of ready-mixed concrete transportation, the transportation fee amounts to 5,115,000 KRW. If transportation fees increase by 15% based on the same criteria, the monthly transportation fee will rise to 5,882,250 KRW.

Metropolitan ready-mixed concrete companies stated, "Ready-mixed concrete transport operators should refrain from excessive transportation fee demands and collective actions that hold construction sites hostage during the current national crisis. If the supply of ready-mixed concrete to construction sites is interrupted, there is no alternative means to transport ready-mixed concrete other than mixer trucks. This situation will inevitably cause damage not only to ready-mixed concrete manufacturers but also to construction companies and ready-mixed concrete transport operators."

This content was produced with the assistance of AI translation services.