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Rail strike hampers overall industrial activities

Rail strike hampers overall industrial activities

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Published : 2013-12-25 20:33
Updated : 2013-12-25 20:33

The logistics sector is estimated to have posted operating losses of about 6 billion won ($5.7 million) over the past weeks in the wake of the railway union’s ongoing strike launched early this month, according to the state-run Korea Railroad Corp. on Sunday.

KORAIL officials said the number of available freight trains fell by 2,546 (or about 170 trains a day) nationwide between Dec. 9 and Dec. 23.

As a result, shipments on freight trains during the period were equivalent to only 39 percent of the average workday. Though the shipments should have reached 1.2 million tons, the figure during the walkout stayed at around 740,000 tons.

In terms of the materials shipped, cement topped the list with shipment reductions of about 500,000 tons; followed by containers, with 29,000 tons; coal, with 150,000 tons; steel, with 70,000 tons; oil, with 7,000 tons; and various other goods, with 21,000 tons.

In particular, the slashed shipments of containers, which carry a variety of manufacturing and agricultural products to major harbors, is dealing a blow to exporters.

The situation is expected to become more serious as KORAIL plans to lower the train operation ratio from the current 39 percent to below 30 percent from the end of December due to a shortage of manpower.

“There are worries over safety because the substitute engineers are being overworked. As the strike lingers on, the situation will become critical,” an official said.

“Further, should the unionized workers’ sit-in protest continue next month, KORAIL may have to suspend all operations of freight trains after Jan. 6,” he said.

In a bid to minimize damages to exporters, the Korea Customs Service has decided once again to extend the cargo ships’ anchorage period for goods-loading at harbors from the present 45 days to 60 days.

Earlier this month, the authorities initially extended the loading permission period from 30 days to 45 days.

The policy comes as some exporters, which are suffering from accumulated delays in train shipments to harbors, may have to pay customs-related penalties due to longer-than-expected anchorage periods.

On Dec. 9, the board of the Korea Railroad Corp. endorsed a plan to establish an affiliate for a new bullet train operation despite a full-fledged protest by the unionized workers, who claimed the spin-off was a behind-the-scenes step toward a government-led privatization attempt.

By Kim Yon-se (kys@heraldcorp.com)

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