Hanjin’s woes spread in a domino effect

Mr. Lee is a 46-year-old yard truck driver who transports containers for a company contracted with Hanjin Shipping at the Pusan Newport terminal in Gangseo District in Busan.

Lee earns an average of 2.1 million won ($1,930) a month, but after this month he will be out of a job.

The company that he had been employed with was contracted to transport cargo at the terminal for the troubled Hanjin Shipping, which is now under court receivership, and this company likewise received a termination of contract notification from Hanjin.

The company employed 57 yard truck drivers, including Lee, and another transportation company at the terminal, also contracted with Hanjin, has 53 drivers. That’s a total of 110 drivers out of work because of Hanjin’s financial collapse.

“What will happen to the payment of 800 million won for the past three months that we haven’t yet received?” asked one head of a company that worked for Hanjin handling lashing, or securing containers to load onto vessels.

He had avoided working with Hanjin but began business with the shipping company because of a guarantee from the Busan Port Authority.

“If we don’t receive payment soon,” he said, “we will abandon our projects.”

Ahead of the upcoming Chuseok holidays, the economic situation is dire for southern coastal cities such as Busan and Ulsan, as well as the South Gyeongsang and South Jeolla regions.

Small- and medium-sized companies, laborers and residents are having a tough time as the shipbuilding industry is in a slump and faces restructuring. The southern coastal region has also seen a domino effect from the long heat wave threatening the fishing industry as well as concern over the spread of cholera.

According to the Busan Port Authority on Tuesday, 457 contracted companies that have worked for Hanjin have not received payments totaling 64 billion won.

Of this, companies that had been involved in services for Hanjin such as checking, loading and unloading cargo have yet to receive 5.281 billion won.

Likewise, five terminals at Busan’s Newport and four at the North Port have failed to receive 27.9 billion won in payments.

Because of the slump in the shipbuilding industry, among other factors, the payment of wages this year is looking to be the worst on record. According to the Ministry of Labor and Employment, as of the end of July, some 184,355 have not received a total of 813.1 billion won in wages, an increase by 9 percent compared to last year. In the same period last year, 168,149 did not receive a total payment of 752.1 billion won in wages.

Also through July of this year, in the Busan and South Gyeongsang region, 33,778 people did not receive a total wage of 145.1 million won, 20 percent more than last year.

In just the shipping industry in South Gyeongsang’s Geoje, Tongyeong and Goseong counties, 5,666 workers did not receive 25.5 billion won in payments, an 89-percent spike.

It’s not just laborers that are affected, either. Fishermen and merchants are likewise suffering from the extended heat wave this summer, in addition to a recent cholera scare.

According to the South Jeolla provincial government, 571 fishermen who farmed fish in Yeosu, Goheung, Jangheung and Wando lost 88.66 million fish, leading to a loss of 71.4 billion won. Abalone losses hit the South Jeolla region especially hard, as 467 fishermen lost over 78 million abalone.

Han Byung-chil, a 43-year-old fisherman from Wando County, said, “Because of the loss of abalone, we won’t see the income we were expecting for the Chuseok holiday, and we’re in a pinch because we don’t even have money to bring in young abalone.”

After three cholera patients emerged from Busan and the South Gyeongsang area, with a possible fourth, seafood restaurants are also taking a hit.

“We don’t have customers but are keeping our doors open,” said Lee Ki-jae, who sells fish at Busan’s Jagalchi Market. “This situation has to be settled as soon as possible.”

“In the past four days,” Jang Yeong-seok, who owns a sushi restaurant in Gohyeon-dong in Geoje, “we closed our doors and then began operation again, but on Sept. 5, we only had reservation tables.”

BY HWANG SUN-YOON, KIM HO AND KANG SEUNG-WOO [kim.sarah@joongang.co.kr]