"Sales Loss of 106.1 Billion KRW, Relief at Escaping Worst Crisis Including Production Line Halt"
[Asia Economy Reporter Kim Jong-hwa] The cement industry stated on the 15th that "the Safe Freight Rate System, which is scheduled to be implemented until this year based on a three-year sunset clause, should be terminated as planned."
The Korea Cement Association announced its "Position of the Cement Industry on the End of the Cargo Solidarity Collective Transport Refusal" on the same day, expressing "we cannot hide our bewilderment over the agreement between the Ministry of Land, Infrastructure and Transport and Cargo Solidarity to continue the system excluding the cement industry," and made this claim.
The association strongly opposed, saying, "The inclusion of bulk cement trailer (BCT) vehicles for cement transport, which account for only 0.7% of all freight trucks, in the applicable items of the Safe Freight Rate System lacks representativeness to reflect the overall freight transport environment and is an unacceptable measure." According to the cement industry, logistics costs have increased by about 120 billion KRW annually since the Safe Freight Rate System was implemented for BCT vehicles.
Regarding the end of Cargo Solidarity's transport refusal, they said, "We are relieved that further damage can be prevented, and we express our gratitude to the Ministry of Land, Infrastructure and Transport for their efforts to resolve the situation." Since the start of the transport refusal on the 7th, the cement industry has faced a worst-case crisis with cumulative sales losses reaching 106.1 billion KRW over eight days until yesterday, and even some production lines at cement plants were halted. This caused significant damage not only to the cement industry as the shipper but also to related industries such as ready-mixed concrete and construction.
Cement shipment and transport have been normalized. The industry explained, "We resumed the cement shipment system and normalized transport from this morning," adding, "We will do our best to promptly supply cement to demand sites such as ready-mixed concrete plants and construction sites, and we plan to strengthen the logistics system to ensure smooth supply in case of similar situations in the future."
The association reiterated its stance that the Safe Freight Rate System should be terminated. It appealed, "Since the composition and decision-making procedures of the Safe Freight Rate Committee that determines the safe freight rates, as well as the freight rate calculation method, are not transparent, it is appropriate to leave it to the autonomy of market functions and reconsider it from the beginning," and requested, "We ask the National Assembly to thoroughly deliberate on this and decide on the legitimacy of the system."
They added, "Considering the worsening management conditions of the cement industry due to the sharp rise in raw material prices, we request responsible efforts from the government to prevent the recurrence of Cargo Solidarity's collective transport refusal."
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