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Japan's major delivery companies see $243m hike in labor costs

Yamato Holdings expects to hire 10,000 workers in fiscal 2017

Yamato Holdings expects its labor costs to soar as it goes on a hiring spree.

TOKYO -- Four of Japan's listed delivery companies, including the biggest, Yamato Holdings, expect to see their combined labor costs, including payments for outsourced deliveries, increase 27 billion yen ($243 million) during the current fiscal year.

The combined operating profit of the companies -- Japan Post, Fukuyama Transporting and Nippon Express are the other three -- is expected to fall 19%. Of this, 90% is attributable to increased labor costs.

Yamato Holdings expects its labor bill to rise by 16.3 billion yen in the current fiscal year as it tries to hire 10,000 more drivers and other staff to help it with a sharp increase in deliveries.

Japan Post, a wholly owned subsidiary of Japan Post Holdings, expects to see its labor costs grow by 9.1 billion yen. Fukuyama Transporting estimates a 2 billion yen increase combined in labor and outsourced delivery expenses. Nippon Express sees its outsourcing costs increasing by 6.2 billion yen. 

All four companies are now working to pass on their increased labor costs via higher delivery charges. Yamato Holdings, for example, plans to raise fees for small-lot deliveries by an average of 10% in October. It is negotiating rate hikes with about 1,000 large customers.

(Nikkei)

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