One of Asia’s biggest shipping line, HMM, said that it could lose $580 million if its operation were halted by worker strikes.
According to analysts, a strike would likely cause further disruption to global tech and auto supply chains which have been strained by shortages and ports bottlenecks.
“If they actually go on strike, it will create knock-on effects on international shipping,” said Uhm Kyung-ah, an analyst at Shinyoung Securities.
On August 22nd, about 450 of HMM’s 600 seafarers voted on industrial action and more than 92% of them opted for a strike. The South Korean shipping giant suffered further blow on Wednesday (Sep 1) when 98% of its 755 unionized office staff voted to strike.
Reports suggests that the union has received resignation letters from 317 seafarers, all expressing an inclination to join Swiss-Italian operator MSC, which is offering 2.5 times what HMM is paying currently.
The unionized seafarers did receive an offer of an 8% rise from HMM which they blatantly rejected. It is estimated that both the company’s seafaring and office staff want salaries raised by 25% after a pay rise of just 2% in 2020.
It is also claimed that HMM did not comply with the rest time stipulated under the Maritime Labour Convention. According to the union, ” Seafarers are supposed to work a maximum of 313 hours a month, including overtime…but some employees work over 320 hours and do not receive any extra pay or rest.”
The strike could further risk disruption to global supply chains that are already battling surging costs and shortages of containers and computer chips.
At present, container shipping groups like HMM are enjoying unprecedented profits as surging demand for goods prompted higher freight rates from the second half of last year.
The South Korean shipping giant reported a record operating profit of USD$2.1 billion in the first half of 2021.
