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POSCO will suspend some plants as the trucker strike in South Korea continues

Image: Reuters Berita 24 English -  POSCO , a South Korean steel company, announced on Sunday that it may shut several of its factories in t...

Image: Reuters

Berita 24 English - POSCO, a South Korean steel company, announced on Sunday that it may shut several of its factories in the country due to a lack of storage space for finished items that have not been dispatched due to a strike by truckers who are demanding higher pay in response to rising gasoline prices.

The walkout by thousands of truckers has affected freight movement at the nation's industrial centres and key ports, prompting POSCO to join Hyundai Motor in halting production.

"Some production at our Pohang steel factories will be suspended, but we do not yet know for how long," a POSCO representative said, adding that the stoppage will take effect on Monday.

The decision was made when the administration and the Cargo Truckers Solidarity union held their fourth round of negotiations to reach a settlement and end the strike that began on June 7.

South Korea is a leading provider of semiconductors, cellphones, automobiles, batteries, and technological products. The strike has exacerbated the disruptions to global supply chains caused by China's severe COVID-19 restrictions and Russia's invasion of Ukraine.

South Korea's staple exports are threatened by a downturn in chip production, petrochemicals, and automobiles, while consumer inflation in Asia's fourth-largest economy is at its highest level in 14 years.

The truckers are requesting a continuation of the subsidies, which are slated to expire this year and ensure minimum salaries despite rising fuel costs.

The Ministry of Land, Infrastructure, and Transport stated in its response to the union that "ship owners, the interested party, want the abolition of the current Safe Trucking Freight Rates System."

On Sunday, 31 industry associations issued an united statement urging truckers to cease their strike and return to work, as bottlenecks are forming in industries such as cement, petrochemical, steel, car, and IT components.

Associations representing employers, taxis, semiconductors, and automobiles, among others, said in a statement: "This escalating strike by Cargo Solidarity is nothing more than holding national logistics hostage in an extreme manner, even though the government has said it will find a way to achieve inclusive growth through talks."

Approximately forty people were arrested during the walkout; some were later released. The actions have been predominantly peaceful, albeit tense in certain spots.

The ministry estimates that approximately 6,600 truckers, or 30% of Cargo Truckers Solidarity union members, were on strike on Saturday, suspending trucking operations at petrochemical facilities in Ulsan and reducing POSCO product delivery.

The union asserts, without providing a specific figure, that the number of striking truckers was greater, and that non-union truckers also chose not to work.

According to a government official, container traffic at Busan port, which accounts for 80 percent of the nation's total, fell by two-thirds from usual levels on Friday.

At the port of Incheon, container traffic has decreased by 80 percent, while at the port of Ulsan, the industrial hub where most of the strike action has taken place, container traffic has been suspended since Tuesday.

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