The formidable truckers’ strike in South Korea came to an end after a tentative agreement was struck after late-night negotiations on Tuesday, June 14. Truck drivers returned to work on Wednesday after the deal approving the key demands put forward by the union was approved by the nation’s transport ministry.
Organized by Cargo Truckers Solidarity Union, thousands of truck drivers were on an indefinite strike from June 7, bringing all ports and movement of crucial industrial goods and major exports to a standstill.
Truckers were demanding government intervention to arrest the rising fuel prices and inflation. They had also demanded a significant pay hike and a guarantee towards continuance of the minimum wage rule that was introduced during the COVID-19 pandemic.
Union representatives told reporters that as per the deal, the government has agreed to extend the existing temporary rules on minimum wage guarantees for truck drivers that were due to expire in December this year. The deal also promises to continue discussions on expanding fuel subsidies for freight on additional goods.
“The Cargo Truckers Solidarity Union will immediately return to work, and the Ministry of Land, Infrastructure, and Transport will make utmost efforts so that truckers can return to work…,” the union said in a statement.
The minimum wage system was introduced to support truck drivers who took a beating financially because of rising fuel costs and soaring inflation during the pandemic. The newly-elected administration of conservative President Yoon Suk-yeol expressed reluctance to extend it any further, which threatened to prolong the strike.
The nation’s 420,000 truckers are largely considered as “self-employed” as per labor rules, making them ineligible for protections and guarantees afforded to those recognized as employees. This factor also delayed negotiations as the government did not recognize the Cargo Truckers Solidarity Union as a proper trade union.
According to the government’s own estimates, close to 30% of unionized truckers in the country – around 6,800 drivers – participated in the strike. The union, on the other hand, argued that a much larger number participated, including non-unionized workers.
The negotiations held on Tuesday that sealed the deal were the fifth to take place between the government and the union representatives. The strike intensified after negotiations failed to yield any results last Saturday despite a marathon 10-hour meeting.
The strike hit the South Korean economy hard, with exports witnessing a sharp decline of around 13% in the first 10 days of June. Meanwhile, the daily volume of container goods transported from the 12 ports in the country dropped by 68%.
According to estimates, the economy suffered a loss of nearly USD 1.2 billion. Delays in the shipment of steel, cement, petrol and petrochemicals and cleaning agents, among others items, led to a temporary halt at top manufacturers across various sectors including automobiles and electronics.
The strike also threatened to disrupt the production of semiconductor chips. South Korea is the second-largest major manufacturer of chips in the world with a global market share of nearly 15%. With chip cleaning supplies being hit due to the strike, manufacturers feared a major disruption in global supply chains.
The government’s response until Tuesday was to threaten strikers and union organizers. So far, over 44 strikers and union organizers have faced arrests for participating in rallies organized by the union.
Transport Minister Won Hee-ryong had earlier threatened further arrests as the truckers decided to continue the strike after failed talks. But with growing popular support for the truckers, especially with spiraling fuel costs, the government eventually gave in to their demands.