TOKYO, April 7 (Reuters) – Truck driver Yuichi Tomita has been delivering packages all more than Japan for two decades, normally clocking 40 straight hours on the road. He says the perform is hard but a supply of pride, and one particular he’s never ever believed of quitting – till now.

On April 1, 2024, the government will limit truck drivers’ annual overtime to 960 hours, amongst other reforms officials say are meant to strengthen the job’s notoriously gruelling circumstances and make it extra eye-catching.

Drivers such as Tomita say the law will as an alternative lead to an exodus from an occupation exactly where most will need these further hours to spend the bills.

That has sparked fears of what these in retail and logistics get in touch with the “2024 crisis”: a crucial shortage of truck drivers that, if unaddressed, could leave a third of all cargo undelivered and outcome in a prospective ten trillion yen ($76 billion) hit to the world’s third-biggest economy by 2030, by government estimates.

“I’ve been carrying out this job for 20 years and you just can not make ends meet on base spend alone,” stated Tomita, a second-generation trucker and father of a three-year-old. “I genuinely feel this crisis is going to threaten Japan’s economy and households like ours.”

Drivers make four.46 million yen ($34,000) a year on typical. That is about ten% beneath the typical for all industries in spite of functioning 20% longer hours.

An anticipated drop-off in the quantity of truck drivers would set off a domino impact for farmers, shops and diners accustomed to subsequent-day delivery of fresh fish and crisp create.

The international consultancy Roland Berger expects a 20% decline in the quantity of Japanese truck drivers in the decade to 2030.

“Basically place, persons in Tokyo will have no signifies to get fresh vegetables or fish from Kyushu (in southern Japan) and other far-off regions,” stated Masashi Onozuka, a companion at consultancy

Roland Berger who serves on the government’s study group for

sustainable logistics systems. “That could influence customer spending and other regions also.”

SQUEEZED

About 98% of Japan’s 62,000 trucking businesses – accountable for delivering practically all of the country’s cargo – are little operations. Fierce competitors and higher fuel rates imply truck drivers are squeezed also in spite of an acute labour shortage.

A current government survey showed trucking businesses have been in a position to pass on only 19% of their expense increases, compared with 47% for little- and medium-sized firms. That would make it tricky for little businesses to employ to make up for the reduced quantity of legal functioning hours per driver.

Underscoring the issues smaller sized players face, the Fair Trade Commission in December named and shamed 13 firms that it stated abused their superior bargaining energy to refuse price tag improve requests from smaller sized contractors and suppliers. Six have been logistics and delivery majors, which includes Trancom (9058.T) and Sagawa Express (9143.T). Each businesses promised to make improvements.

Prime Minister Fumio Kishida final month instructed his cabinet to come up with “drastic” measures by June to address the crisis. A committed lane more than a 100km (62-mile) stretch of highway connecting Tokyo and Nagoya for self-driving trucks and a flight route for delivery drones are planned from subsequent fiscal year.

Some retailers have devised strategies to soften the influence.

Comfort retailer operator Lawson (2651.T) will minimize deliveries of lunch boxes to twice a day from 3 occasions for all outlets by April 2024. Supermarket chain operators Summit, Maruetsu, Yaoko (8279.T) and Life Corp (8194.T) agreed to enable an further day for delivery and minimize overnight shipping.

Quite a few far-flung producers, even though, have no program.

Farmers and fish wholesalers from Kyushu to the northernmost island of Hokkaido worry for their livelihood and nearby economies if there are not sufficient drivers.

Masaaki Iwamori, an official at the Ehime Fishers Cooperative on the western island of Shikoku, stated the town of Uwajima could wither without having trucks to provide its famed amberjack by two a.m. to Tokyo’s key fish market place, a 12-hour drive away.

“If the fish are not prepared in time, they drop their freshness when they are auctioned the subsequent day” at a substantial discount, he stated. “Possibly after customers begin noticing the drop in top quality, they will share the sense of crisis.”

($1 = 131.3800 yen)

Reporting by Mariko Katsumura and Satoshi Sugiyama
Editing by Chang-Ran Kim and Gerry Doyle

Our Requirements: The Thomson Reuters Trust Principles.