Dramatic Agreement Reached Between Cargo Solidarity and Government on 'Safe Freight Rate' Extension...

[Image source=Yonhap News]

Strike Withdrawn After 8 Days of Total Strike

Extension Period and Scope of Item Expansion

Concerns Remain Over Lingering Conflicts

[Asia Economy Reporters Kim Min-young, Park Jun-yi] The Korean Confederation of Trade Unions (KCTU) Cargo Solidarity and the government have agreed to extend the Safe Freight Rate System, which was scheduled to end at the end of this year, temporarily resolving the conflict between labor and government after 8 days of total strike. However, concerns have been raised that conflicts may resurface during future discussions on the scope of item expansion and extension period, making this a mere stopgap measure. The ruling and opposition parties also show differing opinions on whether to extend for three years or abolish the sunset clause.

The Ministry of Land, Infrastructure and Transport and the Cargo Solidarity held the 5th working-level dialogue from 8 p.m. on the 14th at the Inland Container Depot (ICD) in Uiwang, Gyeonggi Province, and after about 2 hours and 40 minutes of negotiations, agreed to extend the sunset of the Safe Freight Rate System scheduled for the end of this year. The Safe Freight Rate System imposes fines on consignors who pay freight rates lower than the safe freight rate, which is the minimum rate necessary for traffic safety for cargo drivers. It was introduced for three years in 2020 and was scheduled to end in late December this year.

With this negotiation settlement, the Cargo Solidarity decided to stop collective transport refusal from the 15th and resume logistics transportation. It appears that the prolonged strike-induced logistics chaos, accumulated losses, losses of union members, potential withdrawal of striking union members, and worsening public opinion have all had a complex impact. According to six organizations including the Korea International Trade Association, the Federation of Korean Industries, and the Cement Association, the estimated damage caused by the Cargo Solidarity strike amounts to about 2 trillion won.

The Cargo Solidarity headquarters stated in a press release, "We will suspend the total strike struggle and return to the field by each of the 16 regional headquarters," and urged, "The Cargo Solidarity calls on the government and the National Assembly to keep the agreement with Cargo Solidarity and promptly process the abolition of the Safe Freight Rate System sunset clause and related bills."

Following the agreement between the Ministry of Land, Infrastructure and Transport and the Cargo Solidarity, full-scale amendment discussions are expected to take place in the National Assembly. Both ruling and opposition parties agree on implementing the Safe Freight Rate System, but there are expected to be differences over whether to extend it for three years or abolish the sunset clause altogether.

The People Power Party leans toward extending the sunset clause for three years rather than abolishing it immediately. On the 15th, Lee Jun-seok, leader of the People Power Party, said on KBS radio, "I highly appreciate the purpose of the Safe Freight Rate System," but added, "Due to special circumstances such as COVID-19 during the three-year period of the sunset clause, it was difficult to measure accurately. It is important to have an opportunity to evaluate the results a bit more," suggesting the possibility of extension.

On the other hand, the Democratic Party supports the Cargo Solidarity's position that the sunset clause should be completely abolished and urges legislation. Earlier, Democratic Party lawmaker Jo Oh-seop also took the lead in proposing the "Partial Amendment to the Freight Motor Vehicle Transport Business Act," which aims to abolish the Safe Freight Rate System sunset clause. Woo Sang-ho, the Democratic Party emergency committee chairman, said at the emergency committee meeting that day, "We need to make more fundamental institutional improvements to prevent other problems from occurring."

However, since negotiations on the formation of the National Assembly are delayed, it is expected to be a difficult situation from the start of ruling and opposition party negotiations. In this regard, Woo proposed a four-party meeting among the ruling and opposition party leaders and floor leaders the day before, but the People Power Party expressed refusal. Meanwhile, the Justice Party, which has expressed support for the expansion of the Safe Freight Rate System, is scheduled to hold a meeting with the Cargo Solidarity that morning to discuss related matters.