Won Hee-ryong "Establishing Standard Contract Linked to Oil Prices... To Apply to All Vehicle Owners"

"Transport Refusal Crisis Historically Occurs Whenever Oil Prices Surge"
"Not Against Abolishing the Safe Freight System... Proposing Improvements and Supplements"

Minister of Land, Infrastructure and Transport Won Hee-ryong is giving an additional briefing on the agreement with the Cargo Solidarity on the 16th at the Government Seoul Office in Jongno-gu, Seoul. Photo by Kim Hyun-min kimhyun81@

Won Hee-ryong, Minister of Land, Infrastructure and Transport, stated on the 16th that the collective transportation refusal by the Cargo Solidarity has historically occurred during periods of sharp oil price increases, and he announced plans to recommend a standard contract reflecting oil prices and to establish a system for this purpose.

On the afternoon of the same day, Minister Won held a back briefing at the main government building in Seoul regarding the withdrawal of the Cargo Solidarity's general strike, saying, "Since the transportation refusal has ended, we will improve the system through related discussions once the National Assembly is formed."

Regarding the key issue of the sunset clause of the Safe Freight Rate System, Minister Won said, "The Ministry of Land, Infrastructure and Transport has never opposed the extension of the Safe Freight Rate System." He emphasized that the ministry has prepared a 'Safe Freight Rate System Performance Analysis Report' based on the implementation of the system so far and intends to present problems and alternatives based on it.

He stated, "Although a clear conclusion could not be drawn about the impact of the Safe Freight Rate System on the decrease or increase of accidents or speeding, analyses showed that it had effects such as increased income for truck owners and reduced working hours." He added, "It also had an effect on improving the transportation structure by reducing damages caused by excessive low bidding and multi-level sales." Furthermore, he explained, "Since the implementation of the Safe Freight Rate System, social conflicts such as disputes between cargo owners and between cargo owners and transport companies, as well as transportation refusal actions, have significantly decreased."

However, Minister Won pointed out problems with the composition of the Safe Freight Rate Committee, which determines the safe freight rates, and the basis for calculating freight rates, emphasizing that these issues should be reflected through future discussions. Currently, the Safe Freight Rate Committee is composed of cargo owners, transport companies, truck owners, and public interest members. Since transport companies and truck owners receive freight from cargo owners and distribute profits, they share the same interests, which raises structural concerns that their opinions may be overrepresented in the committee. Minister Won said, "There is a problem that the committee's current composition weakens mutual persuasiveness and makes it difficult to gain agreement from opposing parties."

Minister of Land, Infrastructure and Transport Won Hee-ryong is giving an additional briefing on the agreement with the Cargo Solidarity on the 16th at the Government Seoul Office in Jongno-gu, Seoul. Photo by Hyunmin Kim kimhyun81@

The report also pointed out that the basis for selecting freight rates is weak. Minister Won said, "The basis for appropriate freight rates is prepared through surveys due to personal information issues or opposition from truck owners," adding, "This is a very critical problem in terms of objectivity." He emphasized, "We cannot maintain the Safe Freight Rate System with this structure and intend to gradually improve the problems, which is the consistent position of the Ministry of Land, Infrastructure and Transport."

Minister Won stated that he will prepare alternatives reflecting the Safe Freight Rate System performance analysis report and opinions from various sectors, first recommending a standard contract that includes oil price linkage and establishing a system accordingly.

He noted, "Historically, logistics disruptions, including transportation refusals by non-Cargo Solidarity truck owners, have commonly occurred during periods of sharp oil price increases," and saw the need for a freight rate system linked to oil prices. However, Minister Won said, "Current oil price-linked subsidy systems are all structured as tax-based payments," adding, "This is neither sustainable nor reasonable."

He also mentioned that applying the existing Safe Freight Rate System uniformly to the logistics industry is unrealistic. He said, "Cargo owners outside the Safe Freight Rate System, such as those for container and cement vehicles, are negotiating individually, and individual truck owners with weak bargaining power sometimes have to transport at a loss." He emphasized, "Introducing a freight rate system that reflects the unavoidable essential cost of oil price fluctuations, which everyone must acknowledge, can minimize unnecessary conflicts and direct confrontations." Minister Won added that general freight truck owners, in addition to cement and container truck owners, should also be subject to the oil price-linked standard contract.

Minister Won said, "We are internally preparing these matters, including the standard contract, practical guidelines for cost calculation in freight rates, and the introduction of a new system to reflect oil price increases," and added, "We will ensure these are reflected through discussions in the National Assembly, legislative processes, and amendments to enforcement ordinances in the future."

Minister of Land, Infrastructure and Transport Won Hee-ryong is giving an additional briefing on the agreement with the Cargo Solidarity on the 16th at the Government Seoul Office in Jongno-gu, Seoul. Photo by Hyunmin Kim kimhyun81@

Meanwhile, the Ministry of Land, Infrastructure and Transport reached an agreement with the Cargo Solidarity on the 14th to continue implementing the Safe Freight Rate System beyond next year and to continue follow-up discussions. Accordingly, the Cargo Solidarity withdrew the strike after seven days of the general strike. The Safe Freight Rate System is a system that imposes fines on cargo owners who pay freight rates lower than the safe freight rate, which is the minimum freight necessary for traffic safety for freight drivers. It was introduced for three years in 2020 and was scheduled to end at the end of December this year.

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