On Thursday, September 2, 2021, after 77 days of negotiations, Korea’s largest shipping line and member of THE Alliance, HMM, reached an agreement with its seafarers and land workers to increase wages in order to avoid further disruption to global supply chains.
During the final round of discussions, after 18-hours, the signed agreement included the following terms:
- 9% wage increase, retroactive to the first of the year
- 650 percent productivity and incentive bonuses, paid within the year
- 7 percent rise in welfare benefits
- Create Committee to restore wage competitiveness
- Goal: Prepare a performance-based pay system
BACKGROUND
HMM staff unions were demanding a 25% wage hike and bonuses amounting to 1,200% of their salaries. They claimed their salaries had been frozen for eight years due to the Company’s poor performance between 2011 and 2019.
HMM management countered with an 8% wage hike and a bonus of 500% of salaries leading to discussion of a strike and protest demonstrations.
Meanwhile, MSC has been advertising to Korean seafarers a salary 2.5X HMM compensation for manning experience on ultra-large containerships.
TENSE NEGOTIATIONS
- 90+% of HMM’s Haewon union members voted to strike on Sept. 01.
- 317 HMM seafarers resigned, 453 union members threatened to resign.
- And apply to join MSC
- Picket demonstrations aboard HMM vessels Hyundai Brave & HMM Rotterdam.
- Sept. 1 – National Shipping Labor Union Council & other Korean steamship lines in at the Port of Pusan sounded their horns in solidarity with Haewon union.
- Sept. 2 – Haewon union announced 8-hour demonstration aboard the HMM Gdansko.
After stock prices fell, HMM management was under national pressure to sign the agreement and avoid further disruption to major exporting supply chains, such as technology and the auto industry.
HMM remains Korea’s last large ocean carrier after the shocking bankruptcy of Hanjin Shipping in 2017, and many international players are watching for signs of stability in an already tight capacity global shipping market.
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