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ITF Condemns the South Korean Government and Ruling Party’s backstabbing as Truckers’ Strike Threatens Disruption to Global Supply Chains

13 Jun 2022
Communiqué de presse

PRESS RELEASE: ITF Condemns the South Korean Government and Ruling Party’s backstabbing as Truckers’ Strike Threatens Disruption to Global Supply Chains

 

With a national truckers’ strike causing disruptions across the economy, an agreement between the Korean Public Service and Transport Workers’ Union Cargo Truckers’ Solidarity Division (KPTU-TruckSol), the South Korean Ministry of Land, Infrastructure and Transport (MoLIT), the ruling People Power Party, and business associations appeared in sight late Sunday night (KST). After a provisional agreement was reached, however, the People Power Party reversed its position and negotiations broke down, according to KPTU-TruckSol, an affiliate of the International Transport Workers’ Federation (ITF).  

 

The union has now vowed to escalate its strike action, currently taking place at ports, inland container depots, petrochemical plants, production sites and other logistics hubs across the country.  

 

“We are outraged by this backstabbing on the part of the People Power Party and South Korean Government,” commented ITF General Secretary Stephen Cotton. “The strike is having a massive impact on the Korean economy and could impact global supply chains. In recognition of this our affiliate KPTU-TruckSol has been working hard to reach an agreement. But the government and ruling party are making this impossible.”   

 

In addition to repeatedly reneging on its commitments, the government has labelled the strike ‘an illegal collective refusal of transport’ and promised a strict ‘by-the-law’ response. Already, 49 protesting workers have been arrested, two of whom have been detained.  

 

“We will not stand for these violations of fundamental labour rights and civil liberties, and are considering legal action,” Cotton added.  

 

“The MoLIT waited until after the impact of the strike was being felt across the economy to bring a real proposal to the bargaining table. Now they have gone back on their own proposals and agreements with us. They are responsible for the breakdown in negotiations,” said Bongju Lee, KPTU-TruckSol President.  

 

“We have no choice by to escalate our strike until our demands are met,” he added.   

 

KPTU-TruckSol began the strike at 0:00 on 7 June demanding that the Safe Rates system, which is set to expire at the end of the year, be continued and expanded to all truck drivers. The Safe Rates system guarantees minimum pay rates for owner truck drivers. These rates ensure that drivers can cover the costs of operating their vehicles and can be adjusted to make up for rising fuel costs. Research show that by ensuring drivers a fair income, Safe Rates systems help eradicate dangerous on-road practices that lead to accidents.  

 

 

For more information contact:  

Wol-san Liem, ITF Road Transport Section Vice Chair, +82 10 5103 8419, liem_wolsan@itf.org.uk  

Sunghee Oh, KPTU International Director, +82 10 7128 7809, kptu.intl@gmail.com  

 

 

 

Attachments:  

  1. KPTU-TruckSol Briefing (12 June) 

  2. Background to the Strike  

 

KPTU-TruckSol Briefing: 4th Round of Negotiations with the MoLIT breakdown  

 

  1. TruckSol carried out negotiations with the Ministry of Land, Infrastructure and Transport (MoLIT) from 2:00 to around 10:00pm on Sunday, 12 June. 

  • Participants 

(MoLIT) Gu Hyeonsang Logistics Policy Director, Lee Gyeongsu Logistics Policy Department Secretary, Jo Taeyeong Logistics Industry Department Secretary, Jeong Ilwoong Logistics Policy Department Deputy Director 

(TruckSol) Kim Taeyeong First Vice President, Lee Gwangjae Seoul-Gyeonggi Branch President, Kim Dongsu Daegu- North Gyeongsang Branch President, Kim Meongseop North Jeolla Branch president  

 

  1. Based on the original proposal by the MoLIT, TruckSol engaged in lengthy negotiations towards a joint statement including the People Power Party and client (cargo owner) associations and reached a provisional agreement on the wording ‘will continue to drive forward the Safe Rates system and promise to actively discuss expansion to other freight types’. However, right before finalising the agreement, the People Power Party reversed its position on the provisional agreement and the negotiations broke down.  

 

  1. In the course of the 3rd and 4th rounds the MoLIT repeatedly backtracked after discussions had advanced and an agreement was in sight. It has become clear that the MOLIT has no intention to solve this situation through dialogue with TruckSol, while the People Power Party has no intention to take responsibility despite being the ruling party.  

 

  1. Therefore, TruckSol will continue its unlimited national strike with even more force than before.  

     

  

Background to the strike 

 

  1. Burden on owner truck drivers from skyrocketing fuel prices, increase in operating costs   

  • Average diesel prices have risen from 1,374 won/L in June 2021 to 2,028 won/L in June 2022 (47.6%). This puts a huge burden on truck drivers, who must pay over 30% of the freight rates they receive to cover fuel prices. 

  • Adblue prices have also skyrocketed from 900 won/L to 1773 won/L putting an extra burden on drivers.  

  • On average the monthly fuel costs paid by a general freight truck driver driving a 25-ton rigid vehicle has increased by 2.95 million won since last year (assuming 10,000km travelled, 3,600L fuel used.) For the driver of a 5-ton rigid vehicle, the monthly increase is roughly 1.35 million won.  

  • Despite this increase in fuel prices, the freight rates received by most drivers have stayed the same. With an average take home pay of 3.42 million won, there is almost nothing left after fuel price increases are accounted for. 

  • Drivers need a system that will ensure that increases in fuel prices will be reflected in freight rates paid by the companies at the top of supply chains (known variously as clients, cargo owners, shippers, consignors/consignees). The Safe Rates system, currently applying to a minority of truck drivers, includes such a mechanism (rates can be adjusted to reflect a 50 won increase or decrease in fuel prices every three months). 

 

  1. The Safe Trucking Freight Rates System (Safe Rates system)  

  • A main demand of the KPTU-Cargo Truckers Solidarity Division (KPTU-TruckSol) since 2003, the Safe Rates system was passed into law in 2018 through partial revision of the Transport Trucking Business Act (TTBA)  

  • The definition of safe rates in the TTBA is:  “The minimum freight rates necessary to ensure traffic safety by preventing overwork, speeding, and overloading by guaranteeing owner-operator truck drivers fair freight rates…”

  • Despite TruckSol’s demand for a permanent system applicable across the road freight transport market, the Safe Rates system was introduced for a temporary period (ending 31 December 2022), with enforceable rates applicable to only two sectors (transport of import/export containers and bulk cement, 26,000 vehicles, 6.3%).  

  • Each year (beginning 2019) a Safe Rates Committee composed of 3 representatives of business associations representing cargo owners, 3 representatives of business associations representing transport companies, 3 representatives of truck drivers (KPTU-TruckSol), and 4 government-appointed public interest representatives sets rates for the following year. 

  • The system sets two rates, safe transport rates paid by cargo owners to transport companies, and safe contract rates paid by transport companies to drivers.  

  • Rates are set based on a calculation of the average fixed and variable costs of operating a truck. To this a fair income is added to achieve the safe contract rate for drivers. Fair income for transport companies is added to the safe contract rate to achieve the safe transport rate paid by cargo owners.  

  • With the current Safe Rates system scheduled to expire at the end of 2022, drivers are calling for it to be made permanent and expanded to all sectors of trucking. Related legislation has been proposed in the National Assembly but has not been debated.  

 

  1. The Need for Safe Rates 

 

Increase in trucking accidents 

  • In the 3 years to September 2019, deaths from trucking accidents increased by 8.81% while deaths from passenger vehicles declined. Truck accidents accounted for over half of highway accident deaths in 2019 (116 out of 229), even though trucks account for only 26.9% of highway traffic. 75.5% of all fatal traffic accidents involve trucks, and over half (53.2%) of those killed in highway accidents are truck drivers.  

 

Need to reduce dangerous on road practices by improving working conditions  

  • Economic pressure from low rates of pay forces drivers to engage in unsafe driving practices such as overloading, speeding, and driving while fatigued. 41.9% of highway truck accidents arise from dozing at the wheel and 8.2% from speeding. The vast majority of drivers have experience overloading due to demands by cargo owners or the need to make enough money to pay the bills. Average working time of 16 hours a day (for container trailer drivers) is directly related to poor safety outcomes.  

  • The Safe Rates system is designed to alleviate the economic pressures that force drivers to accept cargo owners’ unreasonable demands, work for excessively long hours, and engage in other unsafe driving practices.  

 

Research shows Safe Rates improves safety  

  • Decades of research demonstrates that increase in rates of pay reduces commercial vehicle accidents and improves safety.2 

  • Recent research in the Australian state of New South Wales, found that the Safe Rates system in effect there resulted in 171 less accidents involving articulated vehicles than would otherwise have been expected between 1989 and 2021. This meant 205 lives were saved.3  

  • Research by KPTU-TruckSol and the Korean government shows that the Safe Rates system has already led to improvements in overloading, speeding, and working hours.4  

  • On 10 June, 3 professional occupational heath and safety organisations and 41 individual academics and experts in related fields submitted a letter to the MoLIT and National Assembly calling for Korean Safe Rates to be made permanent and expanded to more sectors.5 

 

  1. The Government’s Neglect of Its Responsibilities and Violation of Workers’ Rights 

  • When the Safe Rates legislation passed the National Assembly in 2018 it was on condition that, “One year before the system ends, the Minister of Land, Infrastructure and Transport will evaluate the results of implementation of the Safe Rates system and report to the National Assembly with regards to the need for continuation, possible improvements to the system, and other related matters.” However, the government failed to live up to this commitment and refused to engage in meaningful negotiations with TruckSol on continuation of the system or other basic support measures. In response, TruckSol began unlimited national strike action at 0:00 on 7 June. 

  • Before the strike began, the government began labelling it “an illegitimate collective refusal of transport”, calling workers’ strike actions “illegal collective action”, and promising a strict “by-the-law” response.  

  • The morning the strike began, some 7000 police were stationed at logistics hubs around the country. The police have made deliberate attempts to insight striking workers. As of 3:00pm on 13 June, 62 workers had been arrested. Of these 45 were released, 2 have been detained and another 15 are being questioned by the police.  

  • The government has repeated several times that it does not consider KPTU-TruckSol a negotiating partner and told reporters that negotiations underway during the strike are simply “meetings to mediate between stakeholders.” President Yoon Seok-yeol has avoided responsibility, speaking of a need for workers and management to work things out voluntarily, even as a member of his office told the press that as independent contractors truck drivers do not have legal trade union rights.  

  • On 10 June, the Korean Confederation of Trade Unions (KCTU) submitted a request for intervention to the International Labour Organisation concerning these violations of freedom of association and civil liberties.  

  

  1. Impact of the strike 

  • Workers carried out strike actions in 16 regions at dozens of ports, ICDs, petrochemical complexes, production sites and other logistics hubs around the country. The vast majority of KPTU-TruckSol’s 25,000 members and countless non-members participated in the strike leading to a significant impact on the economy in several sectors.  

  • While minimising the impact of the strike, the government has admitted an impact on transport in an out of major ports and on the supply of automobiles, steel, cement, and other commodities.  

  • As of 12 June, the government reported the Port of Busan container yard was 71.6 capacity up 6% from normal levels (65.8%). The Port of Incheon was at 80% capacity 

  • Transport in and out of the Busan and Incheon Ports is at 20~30% of normal levels. With transport of automobiles and auto parts stopped assembly lines are repeatedly being shut down and staring up, only to be shut down again. Production and shipment of steel at Posco, Hyundai Steel and other steel companies has slowed. Shipments from petrochemical plants in Yeosu, Ulsan and Daesan have dropped to 10% of normal times, and it is predicted that production will soon stop completely. A shortage of coal has put some power plants on the brink of closure, while a complete stoppage of cement shipments has stopped work completely at some construction sites. This overall disruption of logistics is leading to breakdowns across the economy.  

  • The international press has reported threats to delicate global supply chains.  

 

  1. State of Negotiations  

  • KPTU-TruckSol has held four rounds of negotiations with the MoLIT since the start of the strike. During the first two rounds, the MoLIT made no proposal for a solution to the strike. It appears the government had underestimated the impact of the strike and assumed it would die out quickly.  

  • It was only after it became clear that a high percentage of union members and non-union drivers were participating in the strike and that the impact was felt across the economy that the MoLIT brought a proposal to the bargaining table. However, they then proceeded to backtrack on their own proposals and agreements, throwing the negotiations into disarray.  

  • Thus, KPTU-TruckSol has vowed to continue the strike at an escalated level until workers’ demands are met.