South Korea Puts Saved Rates Over Safe Freight: Truckers Strike For Second Time In Six Months

South Korea’s safe trucking freight rate system, also commonly known as the “minimum wage system of the roads,” prevents truckers from being overworked, overloaded, and forced to speed by guaranteeing a minimum annual wage. However, the Trucking Transport Business Act which implements this safe rate system is temporary and excludes drivers not in the container and cement industries. In response, the trucker’s union has gone on strike for the second time within six months, demanding a permanent guarantee of minimum freight charges, as well as application of the system to truckers driving oil and chemical tankers, steel and automobile carriers, and package delivery trucks. Unfortunately, the administration has refused to comply. In recent negotiations between the striking trucker’s union and the South Korean government, workers were warned that they could receive penalties such as canceled licenses, up to three years in jail, or a fine of up to 30 million won (approximately $31,000 C.A.D.) if they do not return to work immediately. Many truckers have shaved their heads in protest.

The People Power Party and the Ministry of Land, Infrastructure, and Transport decided to extend the Trucking Transport Business Act, which was set to terminate at the end of this year, by another three years, but have chosen not to permanently increase the minimum rates or to include truckers from other industries.

“If safe rates are applied to those truckers, the public will have to take on more of the logistics cost burden,” Sung said. “To minimize public burden, we have decided to not expand the system to other freight types.”

This harsh sentence is because South Korea’s economy is expected to slow to 1.7% growth next year, down from previous forecasts of 2.1%. However, the 25,000 striking truckers – 10% of whom work in the cement industry – argue that the minimum charges are essential for safety reasons. About 700 people die in truck accidents every year, many of them due to speeding or exhaustion. If adequate minimum wages are provided, truckers won’t be forced to drive as dangerously.

The government may have financial concerns, but if it fails to handle the strikers’ safety concerns, South Korea’s trucking system is likely to see further collective action. Rather than complying with the striking truckers, the government has chosen to threaten them back into line. We will have to see how that decision will play out.