Impact of labor shortages and freight rate increases in the transport industry on product handling and sales

「With issues affecting production, logistics and sales overlapping, including soaring energy and material prices and the logistics crisis, namely the so-called 2024 and 2030 problems, resolving these issues is an urgent priority for the industry as a whole.」

「物流面においては、物流業界を取り巻く環境は一層厳しさを増しておりますが、」

「The flower industry faces declining agricultural employment and changes in the sales environment, as well as logistics issues, making a strategy of selection and concentration necessary.」

「In terms of expenses, improvements in logistics efficiency and labor savings pursued over time proved effective, resulting in cost reductions.」

「The trend of producers continuing to consolidate their shipping destinations in the Tokyo metropolitan area, where purchasing power is high, also continues.」

「Producers have been consolidating their shipping destinations in markets in the Tokyo metropolitan area, where consumer purchasing power is high. Even as overall distribution volumes declined, our company had an abundant and diverse selection of flowers available.」

「Furthermore, as shippers review their destinations in anticipation of the logistics industry's 2024 problem, the trend toward diverse flowers and plants being concentrated at wholesale markets in the Tokyo metropolitan area, where purchasing power is high, has become even stronger.」

「Although we faced difficulties including higher fixed costs due to rising energy prices and higher delivery costs due to a driver shortage, profit increased as a result of higher sales.」

「Meanwhile, uncertainty about the outlook continues due to higher food and energy prices, labor costs and logistics costs.」

「Against this backdrop, shippers are increasing the proportion of their shipments going to wholesale markets in major cities, partly due to work-style reforms in the logistics industry.」

「The industry's 2024 problem has also led production areas to tend to limit their shipping destinations to wholesale markets in the Tokyo metropolitan area, where purchasing power is high.」

「Although we faced difficulties including higher delivery costs due to a driver shortage, we promoted efficiency improvements and labor savings in on-site logistics and worked to reduce logistics costs.」

「In the flower industry, difficult supply conditions continue, including higher prices for production materials, shortages of imported products, and labour shortages.」

「Meanwhile, domestic flower production has been declining, and shipments have tended to become concentrated in wholesale markets in major cities, partly due to work-style reforms in the logistics industry.」

「Although imports of potted plants and other products remained popular, imports stayed at approximately 75% of the previous year's level due to continued reductions in air and sea freight services, and shortages continued across the market.」

「We worked to make full use of our collection and distribution capabilities so that flowers and greenery could be delivered nationwide, even as flights and long-haul truck services were reduced.」

「In terms of costs, we promoted logistics efficiency and labor savings and achieved some cost reductions, but higher personnel expenses and rising delivery costs prevented an improvement in operating profit.」

「The flower industry has been reviewing its distribution and sales channels to respond to diversifying consumer needs, but a challenging business environment continues at every stage from production to sales due to labor shortages and soaring logistics costs.」

「In the floral industry, labor shortages and higher delivery costs constrained transactions, while successive natural disasters often made it impossible to meet consumer expectations regarding product collection and quality.」

「Although potted plants such as succulents, including cacti, and foliage plants for interior decoration were popular, rising distribution costs limited procurement, preventing sales from growing as planned.」

「Furthermore, repeated freight rate increases resulting from labor shortages and other factors in the transport industry have forced many regional markets, intermediate wholesalers and major retailers to shift the weighting of their procurement sources to core local markets. This was also a major setback for our Group, which handles products from across Japan and the largest number of items. In particular, Kyushu Ota Hanagaki Co., Ltd., a consolidated subsidiary operating in Kyushu, was affected by freight rate increases, and its inability to handle sufficient volumes of high-quality products from the Kanto region and further north during the summer was also a factor in the decline in sales.」