'One Week of Logistics Strike' Industry-Wide Cracks... Factories Also Halt (Comprehensive)

Steel Industry Faces Production Disruptions Due to Shipment Failures
Automotive Industry Moves Vehicles Directly
Cement Industry Accumulates 91.2 Billion KRW Losses
Widespread Industrial Losses Snowball
Negotiations Difficult, Raising Concerns of Prolonged Impact

On the afternoon of the 10th, ready-mix concrete trucks are parked at a ready-mix concrete factory in downtown Busan. [Image source=Yonhap News]

[Asia Economy Reporters Jonghwa Kim, Hyunseok Yoo, Donghoon Jung] Company A, a national designated blood product pharmaceutical manufacturer, has had the export of plasma, which is the raw material for pharmaceuticals, halted after its arrival at Busan Port due to the nationwide general strike by the Cargo Solidarity of the Public Transport Workers' Union under the Korean Confederation of Trade Unions. Company A is facing a loss of 3 billion KRW as timely supply of pharmaceuticals becomes inevitably disrupted due to production delays.

Company B, which produces IPA used for cleaning semiconductor wafers and exports it to China, is currently experiencing disruptions in semiconductor production due to recent delivery delays. The company’s exports of about 90 tons, equivalent to roughly one week’s supply, have been blocked due to the Cargo Solidarity strike.

The strike by the Cargo Solidarity has brought the logistics lifeline to a halt, causing ruptures across various industries. Side effects such as delivery delays and production stoppages due to logistics disruptions are emerging rapidly, prompting President Yoon Suk-yeol to order the preparation of multifaceted countermeasures. However, as breakthroughs in negotiations between the government and the Cargo Solidarity remain difficult, concerns are rising that the strike may be prolonged.

According to industry sources on the 14th, POSCO, which had some suspension of wire rod and cold-rolled steel sheet production at its Pohang Steelworks starting the previous day, is currently experiencing production disruptions of about 24,000 tons of wire rod and cold-rolled steel sheets. Products that could not be shipped over two days amount to 70,000 tons. Hyundai Steel has also completely halted product shipments. Since the strike began on the 7th, a total of 320,000 tons of products have not been shipped from five plants in Dangjin, Incheon, Pohang, and other locations, with a typical daily shipment volume of about 40,000 tons. A Hyundai Steel official explained, "If the Cargo Solidarity strike continues, it will be inevitable to adjust inventory by controlling production volume due to limitations at the product sites."

In the automotive sector, production disruptions are occurring as parts supply is not properly maintained, leading to a situation where sales staff are directly moving vehicles themselves. The automotive industry task force (TF) responding to the Cargo Solidarity’s collective transport refusal estimated that production losses in the domestic finished car industry from the 8th to the 11th reached 5,400 units. The TF stated, "Production disruptions are accumulating due to parts supply shortages caused by the Cargo Solidarity’s collective transport refusal. Although road transport and alternative equipment are being deployed, if the strike prolongs, problems will arise in vehicle delivery and exports, raising concerns about widespread adverse effects on the automotive industry."

The cement and ready-mixed concrete industries are reaching a point where they can no longer endure the damage. The cement industry has no place to stockpile cement inventory and is forced to halt factory operations, while the ready-mixed concrete industry is pushed to the brink of a complete stop.

As of the day before, the 11th day of the Cargo Solidarity general strike, the cumulative losses in the cement industry were estimated at 91.2 billion KRW. Cement shipments were 23,700 tons, only about 13% of the approximately 180,000 tons shipped on a typical weekday during peak season, with shipment disruptions totaling 156,300 tons, resulting in losses of 14.5 billion KRW. The cumulative loss reached 91.2 billion KRW just seven days after the strike began, and it was expected to exceed 100 billion KRW by today.

If the strike does not end by this weekend, some cement plants are expected to suspend operations. Although efforts are being made to minimize inventory increases at production plants by converting domestic shipments to exports due to storage capacity limits, this too will reach its limit by this weekend.

The ready-mixed concrete industry, which has already stopped operations nationwide, is estimated to be losing 50 billion KRW in sales daily. All plants of Sampyo Industry and Aju Industry have ceased operations, and only one of the 24 plants of Eugene Corporation is shipping normally.

The Ministry of Land, Infrastructure and Transport announced that about 6,800 members (estimated by police), approximately 31% of the 22,000 Cargo Solidarity union members, are participating in rallies across 14 regions nationwide, continuing the strike. The container occupancy rate by port (the ratio of containers actually stored to the port’s container storage capacity) was 72.7%, slightly higher than the usual 65.8%.

However, at some ports such as Busan Port and Ulsan Port, local transport obstruction acts caused a decrease in import and export volumes compared to normal times. At Incheon Port container terminal, the occupancy rate as of 10 a.m. that day was 83.3%, 4.2 percentage points higher than the same time last month (79.1%), marking the highest level since the strike began. At Incheon New Port, some terminals even exceeded a 93% occupancy rate.

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