HMM, Strike Eventually... Concerns Over Export Crisis

Wage Increase Dispute Unresolved
Maritime Union's Final Collective Bargaining Breakdown
Strike Mediation Requested at Central Labor Commission
First Possible Strike Since Establishment

Workers at Busan New Port are loading cargo onto the HMM container ship Shanghai.

[Asia Economy Reporter Dongwoo Lee] The wage and collective bargaining negotiations between labor and management at HMM, the largest domestic deep-sea container shipping company, have finally broken down, bringing the company to the brink of its first-ever strike. As concerns grow over HMM's inaugural strike since its founding, export companies are on edge, warning that in the worst-case scenario, it could directly lead to an export crisis.

According to the shipping industry on the 12th, HMM's maritime labor union and management held their fourth negotiation session yesterday afternoon but failed to narrow their differences and declared the talks deadlocked. Management proposed a 5.5% wage increase and a performance bonus equal to 100% of the base salary, while the maritime union, as in the previous three negotiations, demanded a 25% wage increase and a 1200% performance bonus.

Immediately after the final breakdown of negotiations, HMM's maritime union applied for labor dispute mediation with the Central Labor Relations Commission (CLRC). The schedule for the first CLRC mediation meeting has not yet been decided. Jeonggeun Jeon, chairman of HMM's maritime union, stated, "We advocated for improved treatment based on data from external consulting indicating that a wage increase of about 11.8% is necessary, but we ultimately failed to reach an agreement with management."

The land-based union, composed of office workers, also held a six-hour first CLRC meeting on the 9th but failed to reach an agreement and plans to hold a second meeting on the 13th.

Both HMM's land and maritime unions argue that, given this year's record-high performance, wage normalization is necessary. In fact, HMM workers' wages have been frozen for up to eight years, with an average annual salary of about 69 million KRW, approximately 20 million KRW lower than that of domestic mid-sized shipping companies such as Hyundai Glovis and Pan Ocean. The company recorded an operating profit of 1.0193 trillion KRW in the first quarter of this year, marking a quarterly record high.

Prioritizing CLRC Mediation Over Strike... "Requesting Management's Negotiation Proposal"

Whether a strike will materialize remains uncertain. The union's stance is to focus on reaching a smooth agreement through the CLRC mediation process rather than immediately considering a strike. Previously, labor and management avoided a strike by successfully concluding collective bargaining negotiations just 30 minutes before the New Year during last year's CLRC talks.

The maritime union is considering suspending workers' overtime as part of a lawful protest while proceeding with the CLRC mediation. The strategy is to halt operations beyond the regulated overtime to uphold legal rights and encourage management to take a more proactive stance at the negotiation table.

Some in the industry speculate that, given this year's record-breaking performance, if sufficient compensation is not provided to workers, the union may secure the right to strike through a labor dispute vote.

If HMM actually goes on strike, concerns are mounting that it could escalate into an export crisis for domestic companies. The Shanghai Containerized Freight Index (SCFI), which indicates freight rates on maritime shipping routes, reached a record high of 4225.86 last week, nearly quadrupling over the past year.

Jinman Kim, chairman of HMM's land-based union, said, "The union has never entered negotiations with the goal of striking," adding, "If management brings a negotiation proposal regarding improved treatment in line with increased workload and productivity, we will discuss it thoroughly."

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