Urgent meeting of 6 carrier groups
Loss of cement sales 18 billion per day
There was a 30% reduction in petrochemical shipments
Cumulative damage to the steel industry of 800 billion won
“This week’s golden hour… The strike must be stopped immediately.”
As the strike at the Cargo Solidarity Headquarters (Cargo Solidarity) of the public transport union of the Confederation of Korean Trade Unions lasted for a week, the industry estimated that more than 1 trillion won in cumulative damage had occurred. There are concerns that the factory will have no choice but to close immediately if shipments do not normalize by the weekend. Transport organizations appealed once again for an immediate end to the strike, saying, “The period remaining before the weekend is golden time.”
◇ “The mileage of the new car I’ve been waiting for for 2 years is already 200km”
The Korea Cement Association, the Korea Petrochemical Association, the Korea Petroleum Association, the Korea Automobile Manufacturers Association, the Korea Iron and Steel Association, and the Korea Animal Feed Association reported the damage at an emergency press conference held on the 30th organized by the International Trade Association Korea.
In the cement industry, which transported 180,000 to 200,000 tonnes a day during the peak season, shipments plunged to less than 10% after the strike. As a result, sales losses of 18 billion won per day occur. Shipments from cement production plants in Donghae, Danyang, and Jecheon and distribution centers in the metropolitan area have been completely suspended.
The damage to the ready-mixed concrete industry is also significant. As a result of a survey by the Korea Construction Association, ready-mix concrete was stopped at 256 construction sites, or 56% of 459 construction sites nationwide.
In the petrochemical industry, shipments of goods have been disrupted since the 28th. As daily average loads plunge 30% compared to normal (74,000 tons, about 97 billion won), a compensation of 68 billion won per day occurs.
In the car industry, it is estimated that associated burdens such as labor costs are around 400 million gained as finished cars are transported by ‘truckload’ (a method where workers drive and transport finished cars directly). Customer dissatisfaction is also increasing as new vehicle mileage increases due to road loads and delivery schedules are delayed. On the site, voices say, “The mileage of the new car I’ve been waiting for two years is already 200 km.”
◇ Steel damage 800 billion won… “Factory to be closed next week”
Steelmakers suffered damages worth 800 billion earned due to transportation disruptions of a cumulative 600,000 tons. Concerns are growing as the risk of a strike overlaps while the damage caused by typhoon ‘Hinnamno’ in September is not complete.
Feed manufacturing raw materials imported in containers, such as anchorages (grain residues from alcohol production), have also been suspended for a week.
By the morning of this day, 41 companies had reported a total of 70 cases of damage to the ‘Difficulty / Emergency Damage Reporting Center’ operated by the Korea International Trade Association. Shipments of imported raw materials are stalled, production schedules are disrupted, or export shipments are delayed, leading to instances where one delivery after another cannot be met. Jeong Man-gi, vice president of the Korea International Trade Association, said, “The amount of daily damage is more than 1 trillion won.”
If the current situation continues, it is inevitable that some production facilities in the cement, petrochemical and animal feed industries will be closed. In the case of the petrochemical industry, the average utilization rate has been reduced to the lowest level of 80% due to the recently deteriorated industry conditions, so there is no option but to suspend operation. Due to the nature of the industry, there are concerns that once the operation is stopped, it will take at least two weeks to restart, which can lead to astronomical costs.
Reporter Jang Seo-woo suwu@hankyung.com
