Will the Long-Term Strike Continue Due to the Work Commencement Order?... The Industry is Anxiously Worried

Government Issues First Work Commencement Order Against Cargo Solidarity Strike
Political Resistance Raises Concerns Over Prolonged Logistics Crisis
Some Gas Stations Run Out of Gasoline "Citizen Harm Expected to Increase"

On the 28th, due to the impact of the Cargo Solidarity strike disrupting gasoline supply to gas stations, a "Gasoline Sold Out" sign is posted on the price board at a gas station in Seoul. [Image source=Yonhap News]

[Asia Economy Reporters Kiho Sung and Donghoon Jung] As the government has issued the first-ever ‘work commencement order’ against the nationwide general strike by the Cargo Solidarity Headquarters of the Korean Public Service and Transport Workers' Union, the industrial sector is anxiously concerned about the potential increase in damage. The logistics crisis is likely to worsen as the labor movement faces strong political resistance, potentially leading to a prolonged conflict. The industry views June 1, the seventh day of the strike, as the critical turning point for a possible ‘logistics shutdown,’ and there are fears that if the standoff escalates, direct harm such as fuel shortages at gas stations could affect the public.

According to the Korea International Trade Association (KITA) and the industrial sector on the 29th, as of 8 a.m., 37 companies and 62 cases had been reported to the KITA’s emergency complaint and damage reporting center for collective transport refusal. As the strike enters its sixth day, the number of damage reports and inquiry calls is rapidly increasing. Nearly half (43%) of the cases involve penalty fees due to delivery delays and severed overseas buyer relationships.

Among the four major oil refiners?SK Innovation, GS Caltex, S-Oil, and Hyundai Oilbank?70% of the vehicles are operated by Cargo Solidarity union members, leading to stockouts at some gas stations. This is because fuel transport trucks participating in the strike have not supplied gasoline to gas stations. A representative from the Gas Station Association said, "There are increasing reports that supply requests are not being fulfilled due to insufficient inventory." If the strike prolongs amid the union’s extreme resistance following the work commencement order, a fuel crisis is inevitable. An oil industry official explained, "Typically, gas stations purchase fuel from refiners twice a month. Considering a two-week inventory buffer, if the strike extends beyond a week, supply disruptions could begin at some gas stations."

In Jeonju, Jeollabuk-do, hydrogen bus operations have partially stopped due to the strike. Domestic hydrogen refueling stations supply hydrogen via hydrogen tube trailers, which are large specialized cargo trucks equipped with cartridge-type storage tanks for hydrogen storage and transport. However, with the participation of hydrogen tube trailers in the strike, 13 out of 31 hydrogen city buses operated by Jeonju city have ceased operation.

The steel industry is also facing a red alert. POSCO’s Pohang Steelworks is currently producing only about 40% of its average daily output (50,000 tons) due to recovery work from Typhoon Hinnamnor’s flood damage in September. While there is some storage capacity available, there are serious concerns that the strike could delay recovery efforts. A POSCO official lamented, "It is unclear how long the strike will last and how much damage will accumulate."

Hyundai Steel is experiencing disruptions in shipping about 50,000 tons of products daily across all its plants, including the Dangjin plant. A Hyundai Steel representative said, "There is still some storage space available at individual plants, but the June strike lasted eight days, and if this one extends, the scale of damage is unpredictable."

Automakers such as Hyundai Motor and Kia have been conducting ‘road delivery’ since the 24th, deploying regular employees to directly move finished new cars out of factories and deliver them to customers. The tire industry is responding by securing as many empty container boxes as possible and securing storage yards for finished products. The automotive parts industry is particularly concerned, as production disruptions become inevitable if the strike lasts more than a week. A parts industry official stated, "The parts industry has operated on a ‘just-in-time’ basis, delivering parts immediately to match production line operation rates without storing inventory at factories. Although some inventory has been accumulated recently due to raw material supply difficulties such as semiconductors, if the strike lasts more than a week, factory operations may have to stop." Another issue is that without proper transportation, it becomes difficult to supply parts to automakers, which could disrupt vehicle production.

Professor Hogun Lee of Daeduk University’s Department of Automotive Engineering emphasized, "Unlike before, the automotive industry now holds a certain level of appropriate inventory, so immediate damage may not be visible. However, inventory holding has its limits, so the government must present appropriate measures within a week."

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