HMM Strike Crisis... "Exports Almost at a Complete Standstill"

Haewon Union "Collective Resignation Letters Tomorrow"
First Strike Since 1976 Becomes Reality
Logistics Crisis Inevitable for Export Companies
Double Burden Including Rising Ocean Freight Rates

[Asia Economy Reporters Dongwoo Lee and Junhyung Lee] #Company A, a materials manufacturer located in Chungnam, has an export ratio of about 80% of its total sales. The CEO of Company A described the recent surge in maritime freight rates and HMM’s strike decision as "adding insult to injury." He expressed concern, saying, "There have been countless cases where we failed to keep promises with customers because container shipments were not secured on time," and added, "The situation seems likely to worsen significantly due to HMM’s strike."

With the HMM Seafarers’ Union (the maritime union) voting in favor of a strike, the first strike since the company’s founding in 1976 is effectively imminent. As the maritime union has announced an extreme measure of submitting collective resignation letters, the management opposes excessive wage increases citing creditor management, and the gap between the two sides remains unresolved. This raises the likelihood of a logistics crisis for domestic small and medium export companies due to the upcoming strike.

Background of the Extreme Measure of Submitting 'Collective Resignation Letters' Before the Strike

According to the shipping industry on the 24th, the HMM maritime union held a strike vote the previous day, with 400 out of 434 voters (92.1%) voting in favor. Following the strike approval, the maritime union plans to submit collective resignation letters to management by the 25th and subsequently enforce collective disembarkation of ships entering Busan Port on the grounds of resignation and contract termination.

The maritime union’s refusal to extend boarding contracts and submission of resignation letters is interpreted as an attempt to effectively limit the company’s navigation capabilities. This measure takes into account the Seafarers Act, which restricts industrial actions on ships currently sailing or docked at foreign ports.

Junsoo Jeon, an expert in shipping and emeritus professor at Sogang University’s Business Administration Department, explained, "In maritime transport, seaworthiness refers to the state in which a ship is equipped with the necessary human and material preparations to withstand risks and ensure safe navigation." He analyzed, "If the maritime union submits resignation letters, seaworthiness may not be met in the future, potentially causing operational disruptions."

HMM seafarers typically sign six-month boarding contracts and disembark at the next port upon contract expiration. However, if there are no replacement crew members, contracts can be extended for up to one year. The union explained that recently, due to workforce reductions, there have been cases where seafarers cannot disembark even after submitting resignation letters, resulting in excessive overtime.

A representative of the maritime union stated, "If management comes forward with a progressive proposal, we are open to further negotiations, but if no agreement is reached, we plan to submit collective applications to MSC, a Swiss shipping company that has offered job transfers to Korean seafarers."

Joint Legal Compliance Struggle by Land and Maritime Unions Also Possible... Export Companies on Edge

The HMM land union, composed of office workers, is also scheduled to hold a strike vote on the 30th. If the strike is approved by the land union members, the two unions plan to form a joint struggle committee (tentative name) to coordinate legal compliance struggles and other joint responses.

If the land union, which manages container ship operation schedules, and the maritime union engage in joint action, a logistics crisis for exports is virtually inevitable. Since last year, major global ports have been experiencing persistent logistics congestion following COVID-19, and joint struggles would cause massive disruptions in container handling and departures.

Due to concerns over HMM’s strike, domestic small and medium export companies are facing an emergency situation. The CEO of Company B, a display manufacturer located in Incheon, lamented, "This year has been a continuous emergency due to freight cost issues and difficulties in ship booking," adding, "I believe the overlapping adverse factors are collapsing the supply chain of the related industry."

Seongdae Cho of the Korea International Trade Association’s Institute for International Trade and Commerce explained, "HMM, which effectively handles most domestic small and medium export companies, has no clear alternative if a full-scale strike begins," and emphasized, "It is a time when smooth negotiations between HMM labor and management and active government mediation are necessary."

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