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Delivery schedules have been stretched to breaking, and trucks to replace rail are scarce.
November 30, 2009
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| Korean industry is in crisis mode as the nationwide railroad strike entered its fourth consecutive day yesterday. Manufacturers that rely on the rails to deliver their goods are looking for other routes to Korea’s ports with little luck. The companies have said the strike needs to end immediately, as its impact is only likely to get worse this week. Representatives of the cement industry said they had enough space to store raw materials to make their product for the next four to five days, but after that, if the strike continues, it will face a critical supply problem. That shortage would then spill over to affect the construction industry. “The cement produced in Danyang, North Chungcheong relies 70 percent on the railroad for transportation,” said an official at Hanil Cement. “As the delivery of cement via rail is on hold, we have increased deliveries through special cement trucks, but there is a limit.” Posco, Korea’s largest steel manufacturer, relies on the rail for 5 percent of its delivery needs, and it said it hadn’t experienced any problems yet, but if the strike continues that could change. Trading companies are also on alert. Since the strike, export and import containers in Busan and Gwangyang are facing major delays. Ten percent of the cargo containers circulating in Korea are delivered by rail. Delays in rail delivery are a particularly severe problem for small and mid-sized exporters. “As the strike by the rail workers was anticipated, companies moved quickly to readjust their time tables for delivery, so until this week there weren’t any problems,” said Baek Jae-seon at the Korea International Trade Association. “But starting next week the situation is expected to get serious,” Baek added. Securing trucks as replacements for rail transportation is also another problem, as there are a limited number available. “The inland container delivery trucks in Uiwang, Gyeonggi, usually receive 300,000 won [$256] to 350,000 won for a day’s work, but today it’s difficult to find a truck even when raising the price to 700,000 won or 1 million won,” said Park Sang-joon, an executive at the Korea Rail Logistics Association. By Yum Tae-jung [ojlee82@joongang.co.kr] |
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