Business Impact of Logistics Disruptions and Surging Logistics Costs

「Geopolitical tensions, abnormal weather and other factors could disrupt transportation and increase fuel costs, causing delays and additional expenses in procurement, production and sales and affecting the results and financial position of the Group’s overseas operations. To address soaring logistics costs, the Group will further strengthen logistics rationalization.」

「Disruptions to distribution have occurred because of disruption to global conditions, including regional conflicts, and abnormal weather. Although some disruptions and the surge in logistics costs are beginning to ease, risks remain that could affect the results of the Group, which operates in North America, Europe and Asia.」

「Although logistics disruptions and elevated logistics costs are recovering, we continue to view them as a risk that could affect the Group’s profits. Across the Group, we will review our global production structure to promote local production for local consumption and continue efforts to improve logistics methods.」

「Although disruptions to logistics and soaring logistics costs began to ease in fiscal 2022, it is difficult for them to return to pre-pandemic levels, and they remain a risk that could affect the results of the Group, which operates in North America, Europe and Asia. To address soaring logistics costs, the Group will further strengthen logistics rationalization.」

「Overseas, lockdowns originating from COVID-19 in China have occurred frequently, disrupting and impeding production and logistics worldwide and leaving the economic outlook uncertain.」

「During the cumulative second-quarter period, although restrictions and stagnation in economic activity associated with the COVID-19 pandemic were gradually easing, prices rose sharply amid the prolonged Russia-Ukraine situation, a weaker yen and stronger dollar, and higher crude oil prices, and economic conditions remained extremely challenging. Overseas, lockdowns occurred in the Shanghai region due to the COVID-19 pandemic in China, disrupting and hindering production and logistics worldwide, and the economic outlook remained uncertain.」

「Overseas, lockdowns have occurred in the Shanghai region and elsewhere because of the explosive increase in COVID-19 cases in China. Production and logistics have consequently been disrupted worldwide, and the economic outlook remains uncertain.」

「The rapid economic recovery following the spread of COVID-19, together with disruption to global conditions caused by Russia’s invasion of Ukraine, has resulted in shortages of logistics containers and disruptions to distribution at ports worldwide, causing logistics costs to soar.」

「Overseas, the spread of the Omicron variant progressed earlier than in Japan in the United States, Europe and other regions, and infections continue to increase. This has disrupted production and logistics, leaving the economic outlook uncertain.」

「The automotive industry, a major customer of our Group, remained in difficult conditions, affected not only by COVID-19 but also by pronounced production cuts by automakers due to the global semiconductor shortage, as well as material supply issues, higher prices and increased transportation costs accompanying the economic recovery. However, as production declines and plant shutdowns caused by lockdowns and other factors such as those seen in the previous fiscal year did not occur this fiscal year, domestic production also increased substantially year on year.」

「The automotive industry, a major customer of our Group, was affected by pronounced production cuts by automakers due to the global semiconductor shortage, as well as material supply issues, higher prices and increased transportation costs accompanying the economic recovery. However, as production declines and plant shutdowns caused by lockdowns and other factors such as those seen in the previous fiscal year did not occur this fiscal year, domestic production increased substantially year on year.」

「The rapid economic recovery following the spread of COVID-19 has led to shortages of logistics containers and disruptions to distribution at ports worldwide, resulting in soaring logistics costs. If this situation continues for an extended period, it could affect the results of the Group, which operates in North America, Europe and Asia. To address soaring logistics costs, the Group will further strengthen logistics rationalization.」