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South Korean trucker strike plans to block shipments of materials for semiconductors


An overview of Busan Port, November 5, 2021, Busan, South Korea. South Korean truckers began a wider and more severe strike on Friday. They threatened to reduce shipments of raw materials and products petrochemicals.

Chung Sung-jun | Getty Images News | Getty Images

South Korean truckers took a more extensive and aggressive strike action Friday. This threatened to curtail supplies of raw materials for semiconductors as well as petrochemical products.

This is the top action from steelmaking giants POSCOAutomakers Hyundai Motor Kia.

This strike resulted in a reduction of half of Hyundai Motor’s production capacity at its largest facility complex, located in Ulsan industrial district. According to Reuters witnesses, around 1000 truckers demonstrated in front the complex on Friday.

Hyundai spokeswoman said that “there are some disruptions in our production because of the truckers strike and we hope production will be normalized soon.”

Hyundai usually produces about 6 000 vehicles per day in its Ulsan plants, which includes the Ioniq 5 electric car and high-margin Genesis SUV.

The strike, now in its fourth day of operation has disrupted shipping for many companies and slowed down activity at ports. A government official stated that the movement of containers at Ulsan port has been stopped since June 7. This port accounts for 10% of South Korea’s ports traffic.

According to South Korea’s transportation ministry, around 7,500 members or 35%, of the Cargo Truckers Solidarity union are likely to go on strike this Friday. A union is estimated to be responsible for approximately 6% of 420,000 truck drivers in the country.

Kim Gyeong-dong is a representative of the trucker union and stated that the union had exhausted all funds for the strike on Thursday, so it’s unlikely the strike will last 10 more days.

South Korea is a key supplier of semiconductors as well smartphones and batteries to electronics products. This latest industrial action raises doubts about the global supply chain, which has been disrupted already by China’s tight Covid restrictions, and Russia’s invasion in Ukraine.

According to Park Jeong-tae (a senior official of the truckers union), truckers will stop shipments from raw material for semiconductors made in Ulsan.

Samsung Electronics SK HynixTwo of the most important memory chip producers in the world declined to comment.

Park said that the numbers of vehicles entering Ulsan’s petrochemical complex have been reduced to one tenth the normal level and truckers would tell non-union truckers to stay away from the complex.

Yoon Seok-yeol South Korean president, who has only been in power for a month now, stated on Friday that the government intended to adopt a neutral stance during the dispute.

According to police, around 30 members of the union have been detained so far. They will only respond to any illegal actions at strike-sites.

Truckers in South Korea are considered self-employed contractors and seek pay raises. They also want a promise that an emergency measure guaranteeing freight rates will be extended. This was an emergency measure that was put in place during the pandemic. It is scheduled to expire on December.

Drivers also desire freight rates that apply to more trucks than just cement trucks.

Hyundai Motor shares were 0.6% higher than the benchmark KOSPI by 0332 GMT.