In the strike by truck drivers in South Korea, which has been going on for a week, the government has deployed the military for the first time to relieve the supply chains. On behalf of the Ministry of Transport, it jumps in with about 100 trucks on routes to and from important ports such as Busan, the government announced on Monday. Accordingly, mainly containers are transported.
The 22,000-member drivers’ union began walking out on June 7 to push for higher wages and a minimum wage guarantee in the face of soaring fuel prices. This puts even more pressure on supply chains, which are already under strain around the world. South Korea has a strong international network thanks to global corporations such as Samsung and is an important supplier of semiconductors, smartphones, cars, batteries and electronic items.
According to the Ministry of Industry, the damage to the domestic economy has already reached billions. The production, sales and export losses are given as 1.6 trillion won (almost 1.2 billion euros). The auto, steel, petrochemical and cement industries in particular are suffering from the strike.
Hyundai cuts production, cement manufacturers shut down operations
The Association of the Petrochemical Industry complained that the 32 member companies’ average daily ex-factory deliveries had fallen by 90 percent as a result of the strike. Steelmaker Posco announced it will shut down some plants due to lack of space to store undelivered products. The carmaker Hyundai has reduced production in some factories. Cement manufacturers have also ceased operations.
So far there have been no reports of major production interruptions at semiconductor manufacturers such as Samsung Electronics and SK Hynix. However, a prolonged logistics problem with some chemicals could still cause problems. “Chipmakers typically have sufficient amounts of these materials that they don’t see an immediate impact on their chip production,” an industry insider told Reuters. “But it is worrying that the impact of this strike is spreading across almost every industry.”
