Emergency Management in Effect but Strikes... Growing Damage to Companies and Consumers (Comprehensive)

War-Driven Global Logistics Cost Increase

Already in Emergency Management Situation

Cost Burden... Growing Management Risks

Construction Sites Facing Shutdown Crisis

If Special Vehicles for Cement Transport Stop

There Is Virtually No Way to Respond

If Supply Shortages Cause Delivery Disruptions

Small and Medium Enterprises Bear the Damage and Losses

Delays in Soju Product Shipments from Factories

Convenience Store Industry Faces Urgent Need to Secure Inventory

On the 7th, a kickoff rally for the general strike was held near the Inland Container Depot (ICD) in Uiwang-si, Gyeonggi Province, as the Cargo Solidarity Union launched a general strike demanding the abolition of the sunset clause on safe freight rates and an increase in transportation fees due to high oil prices. Photo by Moon Honam munonam@

[Asia Economy Reporters: Kim Jonghwa, Kim Dongpyo, Song Seungyun, Moon Chaeseok] Companies operating under emergency management systems due to rising global logistics costs caused by geopolitical risks are now on high alert as the Cargo Solidarity Union strike overlaps. If the strike prolongs, it could negatively impact inflation, which is the biggest risk to our economy. After COVID-19, there was optimism about economic recovery due to increased cargo volumes, but this too seems unlikely now.

'Adding Insult to Injury' Amid Global Logistics Crisis

The industry’s main concern is the timing of this strike. It comes amid global logistics disruptions caused by rising oil and petroleum product prices following the Russia-Ukraine war. The sectors expected to suffer immediate visible damage include construction-related industries and distribution, with the shipping industry also unlikely to escape harm.

The cement and ready-mixed concrete (remicon) industries recall the Cargo Solidarity Union strike last year with concern. During peak season, domestic daily cement demand is about 200,000 tons, but during the strike in November last year, daily shipments plummeted to around 40,000 to 50,000 tons. Remicon companies typically stock only one or two days’ worth of cement demand domestically, so supply disruptions are inevitable depending on the strike’s impact. There are about 2,700 to 3,000 Bulk Cement Trailers (BCTs) operating nationwide, with about 1,000 (30%) belonging to the Cargo Solidarity Union. Based on past cases, if union BCT drivers block the cement shipment factories or obstruct non-union drivers, there is no clear way to prevent this.

A cement industry official said, "The Cargo Solidarity Union has already started blocking the main gates of cement factories since the morning of the 7th, causing transportation disruptions. Considering the recent shortage of cement inventory and the immediate shipment upon production, the construction and remicon industries will also be hit."

The strike is also directly impacting the distribution sector, which consumers can immediately feel. Soju is a representative product affected. Companies are adjusting order volumes in preparation for the strike. Since the 4th, Seven Eleven has limited each store to ordering only one box each of bottled and PET products. Emart24 has restricted orders of bottled products to a maximum of three boxes. CU has decided to stop orders for Chamisul Fresh bottled products from some logistics centers starting that day. Earlier, about 130 truck drivers affiliated with Suyang Logistics, a freight transport contractor for HiteJinro, joined the Cargo Solidarity Union under the Korean Confederation of Trade Unions in March and began striking. On the 2nd, striking truck drivers blocked deliveries by other truck drivers, causing inventory overflow at the Icheon factory and temporarily halting product production. HiteJinro plans to normalize logistics deliveries as much as possible through additional transport contracts, but if this situation continues, resolution seems difficult.

Construction Sites in Critical Condition; Prolonged Strike Could Also Hit Large Corporations

Construction sites, already suffering from raw material shortages, are being pushed toward shutdown due to logistics paralysis. There is particular concern about Bulk Cement Trailer (BCT) vehicles stopping. A CEO of a specialized construction company in the Seoul metropolitan area said, "Cement must be transported quickly from factories to remicon companies. If the strike prolongs, it will lead to remicon supply shortages, impacting the entire construction industry."

Since the strike was anticipated, large construction companies have been able to minimize short-term damage by stockpiling materials, but small and medium enterprises find this difficult. The CEO said, "If supply shortages cause delivery disruptions, small construction companies are likely to be deprioritized. They may bear the full brunt of damages and losses caused by construction delays." Another CEO of a specialized construction company said, "With continuous wage increases since last year and rising raw material prices, small construction sites are already on the brink of collapse. Now, with the logistics strike added, we feel utterly desperate."

If the Cargo Solidarity Union strike prolongs, even large corporations that have stockpiled raw materials are expected to face production disruptions. In the shipping industry, where logistics costs greatly affect management, loading and unloading on ships are handled by shipping companies, so they are outside the direct impact of the strike. The problem lies with land transportation, which heavily depends on union members. An HMM official said, "There is no immediate significant impact on ship arrivals and departures, but if the strike intensifies, delays in container movement within ports are expected."

The steel industry plans to use logistics subsidiaries and non-union trucks for transportation but does not rule out some decline in sales or profits. Regardless of the war, there was growing optimism about economic recovery and increased cargo volumes after COVID-19, so the timing of the strike is regrettable. A steel industry official said, "Logistics is a promise to customers, and increased uncertainty due to the strike will raise logistics costs, worsening inflation burdens. We have entered an emergency response system across domestic and international logistics and are seeking ways to coordinate shipments and urgently ship critical volumes through prior communication with major customers."

The semiconductor industry, with relatively small volume, may avoid a direct hit from logistics difficulties but is closely monitoring the strike’s duration. Although alternative transport methods like airplanes exist besides container trucks, a prolonged strike cannot be ruled out. A semiconductor industry official said, "Currently, we believe the Cargo Solidarity Union strike will not have a significant immediate impact. Due to recent supply chain issues, we are managing operations by securing sufficient inventory and are closely watching whether the strike will prolong."

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