News On Japan

Over Half of Japan's Trucking Companies Operating at a Loss

TOKYO, Apr 08 (News On Japan) - An analysis conducted by a national association of trucking companies has revealed that 57% of its member businesses are operating at a loss.

As the logistics industry faces the challenges of the "2024 problem," the association indicates that smaller-scale operators are particularly prone to chronic deficits. The study was carried out by the All Japan Trucking Association, which represents approximately 50,000 trucking businesses, and examined the financial statements for the fiscal year 2022 of 2,558 member companies. According to the findings, 57% of trucking businesses reported losses, exceeding half of the surveyed companies.

When looking at the operating profit margin—a ratio that indicates the percentage of revenue that remains after covering operating expenses—by the number of trucks owned, the results varied. Companies with more than 101 trucks averaged a positive margin of 1.7%, indicating profitability. In contrast, those with 11 to 20 trucks faced an average margin of negative 1.2%, marking six consecutive years of losses, and those with 10 or fewer trucks suffered an average margin of negative 3.6%, a trend continuing for 26 years.

The association points out that businesses owning 20 or fewer trucks make up three-quarters of the industry, and these smaller operators often struggle to pass on the rising costs of fuel and other expenses to their freight charges, leading to persistent losses. The logistics sector is now grappling with the implementation of new regulations that limit overtime hours for truck drivers, which began this month. This regulatory change is anticipated to lead to a reduction in transport volumes, posing a significant challenge known as the "2024 problem" that the industry must address.

Source: NHK

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