Port Logistics Plummet... Government "Preparing to Issue Work Commencement Order"

Minister of Land, Infrastructure and Transport Won Hee-ryong is meeting with members of the Cargo Solidarity Union during his visit to POSCO and steel transport companies in the steel industrial complex located in Pohang, Gyeongbuk, on the afternoon of the 26th. The Ministry of Land, Infrastructure and Transport explained that Minister Won urged the union members to stop the collective transport refusal, saying, "The extension of the sunset clause for the Safe Freight Rate System will be handled by the National Assembly, and dialogue will continue, so please return to work for now." [Image source=Yonhap News]

[Asia Economy Reporter Kim Daehyun] As the general strike of the Cargo Solidarity Headquarters of the Korean Confederation of Trade Unions Public Transport Workers' Union enters its third day, the government is continuing pressure by considering the issuance of a work commencement order. Both sides have agreed to meet face-to-face for the first time since the strike began on the afternoon of the 28th.

According to the Ministry of Land, Infrastructure and Transport on the 26th, from 10 a.m. to 5 p.m. that day, the container import and export volume at 12 ports nationwide was 6,929 TEU, sharply dropping to 19% of the usual level (36,655 TEU). The ports are functioning at about 20% of their normal capacity. The container occupancy rate, which indicates the ratio of containers actually stored compared to the port's container storage capacity, remained at 63.7%, close to the usual level of 64.5%.

The Ministry initially stated that due to pre-transportation preparations for the strike, industrial site damages over the weekend would be minimal, but changed its assessment in the afternoon. It then stated, "As the (general strike) situation continues into the third day, damages at construction sites and other areas are becoming visible, and from early next week, damages are expected to intensify in other industries such as steel."

According to the Korea Cement Association, only 20,000 tons out of the 200,000 tons scheduled for shipment the previous day were actually shipped. Shipments at major bases in the metropolitan area have completely stopped. The ready-mix concrete (Remicon) industry anticipates that production sites nationwide will halt starting from the 29th due to disruptions in cement transportation. Since ready-mix concrete, which is delivered without hardening, typically has a storage capacity of about two days at the final demand sites, construction sites may also sequentially come to a halt. The industry expects that after the weekend, starting from the 28th, numerous construction sites will be 'shut down' due to inability to pour concrete.

Steel company shipments have also been continuously suspended since the strike began. Hyundai Steel has experienced an average daily shipment disruption of 50,000 tons. If the strike prolongs, there is a possibility of supply disruptions for gasoline and kerosene at gas stations. Among drivers at the four major oil refiners (SK, GS, S-OIL, Hyundai Oilbank), 70-80% are members of the Cargo Solidarity.

Meanwhile, the Cargo Solidarity and the government will meet at the Government Sejong Complex on the afternoon of the 28th. This official dialogue is the first since the 15th. However, negotiations are expected to be difficult as the Cargo Solidarity demands the abolition of the sunset clause on the Safe Freight Rate System and expansion of applicable items, while the government maintains it cannot accept these demands.

The Safe Freight Rate System guarantees a minimum transportation fee so that truck drivers do not need to engage in overwork, speeding, or overloading, and imposes fines on shippers who violate the rules. It was temporarily introduced in 2020 for cement and container cargo and is set to expire at the end of this year. The Cargo Solidarity demands ▲ permanent establishment of the Safe Freight Rate System ▲ expansion of applicable vehicle types and items to five categories: steel products, automobiles, hazardous materials, feed/grains, and parcel delivery main and branch lines ▲ and the government and ruling party to scrap their proposed amendments that would weaken the system.

The government is considering selectively issuing work commencement orders for industries severely affected, such as cement and ready-mix concrete, if the strike continues. If the work commencement order is reviewed and approved at the Cabinet meeting on the 29th, it will be the first issuance since its introduction in 2004.

Minister of Land, Infrastructure and Transport Won Heeryong said, "To issue a work commencement order, it is necessary to accurately confirm who refused to work," and "there is a high possibility that the work commencement order will be issued as early as next week," and "we have completed practical preparations to be able to issue it immediately."

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