South Korea's prime minister urged unionised truckers on Tuesday to scrap plans to go on strike this week to spare the economy what he called paralysis and irreversible damage, fuelling fears for the post-pandemic recovery of global supply chains.
For the second time in less than six months, the trucking union in major exporter South Korea has threatened to begin a nationwide strike on Thursday which could disrupt manufacturing and fuel supplies in the world's top 10th economy.
The strike coincides with a worldwide increase in industrial action sparked by a slowdown in the global economy, and a surge in inflation and fuel costs.
"The union's refusal to transport would cause irreparable damage to the national economy beyond logistics paralysis," Prime Minister Han Duck-soo told reporters. "In the worst case, it could lead to the collapse of the logistics system, cutting our industries' external credibility and threatening global competitiveness."
In June, an eight-day strike by South Korean truckers delayed cargo shipments of products ranging from autos to semiconductors in Asia's fourth-largest economy, costing more than $1.2 billion in lost output and unmet deliveries.
The Cargo Truckers Solidarity Union, which has called for the strike, wants the government to extend beyond December its "Safe Trucking Freight Rate", a policy put in place during the COVID-19 pandemic that guarantees a minimum annual wage.
During talks this week, the government and ruling party offered a three-year extension of the scheme, but refused to accept the unions' request to extend these benefits to truckers in better-paying industries, such as fuel and steel.
The union has since rejected this compromise deal, saying the truckers, who are mostly independent contractors, must be protected from fuel price fluctuations and exploitation.
"Life or death, we are going on strike this time with rage," union chief Lee Bong-ju Lee told reporters.
Lee said truckers supplying fuel from the four major refineries would also join the strike. SK Innovation Co Ltd, owner of SK Energy, the country's largest refiner by output, said it was trying its best to prevent any disruptions to its customers. It gave no further details.
During the truckers' strike in June, companies including Hyundai Motor and steelmaker POSCO were forced to cut output.
POSCO on Tuesday warned that the planned strike could slow down repair works to a major plant hit by a flood this summer.
(Reporting by Hyonhee Shin and Ju-min Park; Additional reporting by Heekyong Yang; Editing by Miral Fahmy)
