South Korean Truckers End Strike; Stocks Rally

South Korea's unionized truckers will resume driving on Wednesday, June 15, 2022, after the union and the transport ministry reached a tentative late-night agreement, ending a nationwide strike that crippled ports and industrial hubs, according to Reuters' Byungwook Kim and Heekyong Yang.

Photo Insert: In early trading, Hyundai Motor shares rose 4%, while Hanil Cement shares rose as much as 7%.

The transport ministry and truckers’ union agreed late Tuesday to extend the truckers' minimum wage system and to continue discussions about expanding a minimum pay guarantee for carrying cargo to cover additional products. The transport ministry will also look into increasing fuel subsidies.

Shares in some affected industries rose in early trade, after the eight-day strike had delayed cargo shipments from autos to cement and alcohol, costing South Korea more than $1.2 billion in lost output and unfilled deliveries.

"So, the strike has been called off until our demands are passed in parliament," said Park Jung-hoon, an official at the union's Busan chapter, referring to the process the transport ministry must undertake to implement the agreement. "In the next two to three days, 100% of unionized truckers at Busan port are expected to return to work after they get some rest. There might be some shippers who seek retributions, and in such cases, we will respond strongly."

The strike was an early litmus test for President Yoon Suk-yeol’s new administration, further straining global supply chains already strained by China's COVID-19 restrictions and Russia's invasion of Ukraine.

In early trading, Hyundai Motor shares rose 4%, while Hanil Cement shares rose as much as 7%. "Production has been normalized at our Ulsan Plant and we will continue to minimize customer inconvenience from the production disruption."

Yoo Ji-woong, an analyst at Daol Securities, estimated that the strike had a 5,000-vehicle impact on both Hyundai and Kia, but that there were enough opportunities to make up for lost production during June through overtime.

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