Won Hee-ryong "Difficult to Expand Safety Freight Rate Items... Prices May Rise"

[Image source=Yonhap News]

[Asia Economy Reporter Kim Min-young] On the 22nd, Won Hee-ryong, Minister of Land, Infrastructure and Transport, stated, "We will push to extend the sunset clause of the safety freight rates currently applied to containers and cement by three years, but expanding the applicable items is difficult."

Minister Won Hee-ryong said at a joint briefing with related ministries, "The cargo truck safety freight rate system is a matter where the opinions of stakeholders such as cargo owners, transport companies, and vehicle owners sharply conflict. The Ministry of Land, Infrastructure and Transport has decided its position after discussions with stakeholders," he said.

The safety freight rate system is a system that guarantees a minimum transportation fee to cargo workers to prevent overwork and speeding, and imposes fines on cargo owners who pay less than that amount. It was introduced in March 2020 with a three-year sunset clause and is set to expire at the end of this year.

Minister Won explained, "Regarding the extension of the sunset clause, as a result of temporarily implementing the system, it was confirmed that the traffic safety effect, which was the original purpose of the system, is unclear. Considering the purpose of the sunset clause, it is necessary to observe the effect of the system a little longer through the extension of the sunset clause. In addition, we considered the need to improve the poor working conditions of container and cement truck drivers."

He made it clear that expanding the applicable items is unacceptable. He pointed out, "Regarding the applicable items, it is not appropriate to expand the target when the effect of the system is not clear. If the items are expanded, it could lead to an increase in logistics costs not only for exports and imports but also for major domestic industries, which could result in rising prices. That burden could fall on consumers and the public."

He urged the Cargo Solidarity to withdraw its plan for a large-scale strike scheduled for the 24th. Minister Won said, "The government expresses deep regret over the decision of the Cargo Solidarity and sternly urges the immediate withdrawal of the collective transport refusal plan. We urge the Cargo Solidarity to have mature responsibility and immediately withdraw the collective transport refusal plan, and we ask for cooperation to overcome the economic downturn."

The Ministry of Land, Infrastructure and Transport plans to operate an emergency transport countermeasure headquarters to minimize logistics disruptions in case the Cargo Solidarity proceeds with the strike. He said, "We will operate the emergency transport countermeasure headquarters jointly with related ministries such as the National Police Agency, Ministry of Oceans and Fisheries, Ministry of Trade, Industry and Energy, and Ministry of National Defense, and implement seamless emergency transport measures through close cooperation to minimize national economic damage. The industry is also making efforts to minimize damage by pre-transporting cargo, securing additional loading space, and preparing alternative transport means."

He added, "During the period of collective transport refusal, those who participate in normal transportation will be exempted from highway tolls. Illegal acts that interfere with the transport trucks performing transportation will be dealt with strictly according to law and principles."

The Cargo Solidarity of the Korean Confederation of Trade Unions' National Public Transport Workers' Union announced that 25,000 union members will start a general strike at midnight on the 24th, demanding to block the deterioration of safety freight rates, abolish the sunset clause, and expand vehicle types and items. The strike will be conducted by blocking major logistics bases such as steel, cement, shipbuilding equipment, and automobile parts businesses and refusing transportation.

The Cargo Solidarity claims that the reason for the indefinite strike is the government's failure to fulfill the agreement. Earlier in June, the government and the Cargo Solidarity promised to continue the safety freight rate system and proceed with legal amendments as a condition to end a total of eight days of strikes. However, the Cargo Solidarity views that the Ministry of Land, Infrastructure and Transport has directly denied the purpose of introducing the safety freight rate system and breached the agreement.