May 19, 2017 2:00 am JST

Some 70% of Japan's ground shippers may hike rates: poll

Staff shortage, soaring demand leave companies little choice

Long-haul trucks parked at a truck stop in Kanagawa Prefecture.

TOKYO -- A crippling labor shortage and exploding package volume could end up forcing nearly seven out of 10 Japanese logistics firms to raise shipping rates, a poll by The Nikkei shows.

A survey sent out in late April to 52 logistics companies generated 27 responses from the likes of the delivery units of Japan Post Holdings and Seino Holdings. When it comes to large-volume customers, 12% of shippers said they have already raised rates, starting as far back as January. Another 20% said they are set to raise rates while 36% are considering it. Altogether, that comes to 68%.

Some 55% say they will raise prices by an average of about 10%, while hikes at 36% will be smaller than that. Enshu Truck said clients who have enjoyed the same rates for the past few years will likely see a roughly 5% jump by September.

The Nikkei also sent a survey to 62 mail-order retailers, who contract out much of their deliveries. Of that group, 22 responded, including Seven & i Holdings unit Nissen Holdings and Fast Retailing's Uniqlo clothing chain. While 5% said they have finished negotiating with logistics companies, 21% said they are still in discussions and another 32% that talks are slated to begin.

For retailers that have not wrapped up talks, 23% said they would be willing to accept rate hikes of around 10% while 23% require a smaller jump. Another 15% set their upper limit at around 20%. Some 38% said they would reject any rate increase.

Yamato Transport, Yamato Holdings' home delivery unit, will raise base shipping rates, which largely target individuals, starting Oct. 1. This will be the first such increase in 27 years.

Rivals appear to be following suit. Only 8% of logistics companies said they had raised basic shipping prices this year, but 15% said they are slated to raise them, while another 27% are considering it. The average margin would be about 10%.

A full 63% of respondents, including Fulfillment Holdings, said proceeds from the price hikes will go toward expanding employee benefits. A slightly smaller 59% said they will devote funds to recruitment, while 41% said they will use the extra revenue to offset rising costs. Companies were allowed to choose one or more answers.

Yamato Transport plans to spend roughly 16 billion yen ($143 million) this fiscal year to expand its head count by 9,200 people, up 5% from a year earlier.  

(Nikkei)

Japan Post Holdings Co. Ltd.

Japan

Market(Ticker): TKS(6178)
Sector:
Industry:
Finance
Life/Health Insurance
Market cap(USD): 56,083.1M
Shares: 4,500M

Seino Holdings Co., Ltd.

Japan

Market(Ticker): TKS(9076)
Sector:
Industry:
Transportation
Trucking
Market cap(USD): 2,846M
Shares: 207.68M

Enshu Truck Co., Ltd.

Japan

Market(Ticker): JAS(9057)
Sector:
Industry:
Transportation
Trucking
Market cap(USD): 104.56M
Shares: 7.54M

Seven & I Holdings Co., Ltd.

Japan

Market(Ticker): TKS(3382)
Sector:
Industry:
Retail Trade
Food Retail
Market cap(USD): 37,933.4M
Shares: 886.44M

FAST RETAILING CO., LTD.

Japan

Market(Ticker): TKS(9983)
Sector:
Industry:
Retail Trade
Apparel/Footwear Retail
Market cap(USD): 35,157.6M
Shares: 106.07M

Yamato Holdings Co., Ltd.

Japan

Market(Ticker): TKS(9064)
Sector:
Industry:
Transportation
Air Freight/Couriers
Market cap(USD): 8,595.94M
Shares: 411.34M

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