What is the 2024 problem in the logistics industry? An easy-to-understand explanation of its impact and solutions

Few people fully understand the impact of the 2024 problem on the logistics industry. Currently, revisions to laws related to work style reform are underway, and there is a need to improve the work-life balance of workers. This article will discuss in detail the impact and challenges related to the 2024 problem and provide solutions.

What is the "2024 problem" facing the logistics industry?

The “2024 problem” refers to various issues facing the logistics industry as a result of legal changes that are being implemented as part of the reform of work styles, which will limit annual overtime hours to 960 hours per year from April 1, 2024.

This problem could exacerbate the driver shortage in the transportation industry. The transportation industry operates around the clock to transport and deliver goods, so overtime is frequently required. However, overtime work that exceeds the maximum limit is illegal and subject to penalties.

In fact, some industries are already subject to annual overtime caps. This has helped to optimize working hours and improve the working environment. However, it is not uncommon for drivers in the logistics industry to work many hours and exceed the upper limit. Therefore, the 2024 issue is a particularly serious challenge for the transportation industry.

The logistics industry needs to take various measures to address this problem. Examples include optimizing driver working hours, establishing efficient delivery routes, and promoting reforms in work styles. Improving the working environment and compensation are also important factors.

How the 2024 problem arose

In recent years, the overworking of workers has become an issue and the importance of work-life balance has been attracting attention. Against this backdrop, the government has been working to revise laws to improve the working environment.

In 2024, legal changes in the logistics industry are also planned. This revision is touted to limit the maximum annual overtime hours. Appropriate measures to address this issue are required for the future development of the logistics industry.

Three Impacts of the 2024 Problem on the Logistics Industry

Let’s take a closer look at the specific impact of the 2024 problem on the logistics industry, explaining three impacts.

Sluggish sales and profits of logistics companies due to declining transportation volume

The logistics industry is a labor-intensive industry that depends on human labor, and a company’s sales are largely dependent on human labor. However, the annual cap on overtime hours will be limited starting in 2024, increasing the likelihood that the shortage of truck drivers will worsen, forcing companies to reduce the volume of transportation. This is expected to cause a downturn in sales for logistics companies.

Furthermore, while labor costs are held down by reduced transportation volume, cost issues such as increased fuel costs due to the weak yen also emerge. As a result, costs may rise more than labor costs are controlled, and profits may decrease. Companies need to take various measures, such as securing labor and reviewing efficient transportation routes.

Decrease in truck driver income

Many truck drivers earn their income through overtime work. However, the establishment of annual overtime caps could result in a decrease in overtime pay and thus in a decrease in income.

Companies experiencing particularly significant revenue declines may experience a number of truck driver turnover, resulting in a severe shortage of labor. This will result in a decrease in the volume of transportation and a further decline in revenues. If this negative spiral continues, the company may go bankrupt.

Declining income for truck drivers not only has a major impact on their lives and family finances, but also causes serious problems for the logistics industry as a whole. In addition to the need for better working conditions and better treatment for truck drivers, efforts must also be made to secure efficient human resources and to train truck drivers.

Rising transportation costs

To cover declining sales and revenues, many companies are raising transportation rates. This helps maintain company sales and truck driver revenues.

However, an increase in transportation rates means an increase in financial burden for shippers. Therefore, shippers may shift their requests to other logistics companies. As competition intensifies and the need for competitiveness in terms of price increases, higher transportation rates are a factor that affects business-to-business transactions.

Rising transportation rates in the logistics industry could also change the pricing structure of the industry as a whole. Companies will need to set appropriate pricing and negotiate with customers to remain competitive.

Three Issues for the Logistics Industry to Solve for the 2024 Problem

This section describes three issues that need to be resolved for the 2024 problem.

Longer working hours and lower income than the limits of the Workplace Reform Act

The annual income of truck drivers tends to be lower than the average income of other industries. On the other hand, truck drivers work significantly longer hours than those in other industries, due in part to the increased volume of transportation and the need to respond to customer needs.

Truck drivers working in such poor working conditions are at increased risk of adverse effects on their health and livelihood, and are more likely to have accidents.

The logistics industry needs to seriously address the challenges of long working hours and low income and take remedial measures. These include ensuring appropriate working hours, introducing an appropriate wage structure, and improving the working environment.

Taking the 2024 problem as an opportunity, it is important for the logistics industry to promote reforms in work styles to protect the health and safety of truck drivers and contribute to the development of the industry as a whole. The industry must fulfill its social responsibility while promoting initiatives that will also help to secure human resources and improve labor productivity.

Decrease in truck drivers

Today, many young people are opting for white-collar jobs, and the logistics industry is facing a serious shortage of workers. The number of workers continues to be small compared to the number of job openings.

In addition, the aging of truck drivers is also an issue, making the supply of human resources increasingly difficult. As a result, the logistics industry is expected to suffer from a labor shortage.

Under these circumstances, the logistics industry needs to take new measures to secure and train human resources. It is required to provide attractive work styles and career paths for young people and to improve the working environment.

As we approach the 2024 problem, countermeasures against the decline in the number of truck drivers are an urgent issue. The logistics industry needs to secure and retain human resources through attractive work styles and improved compensation.

Increase in logistics due to expansion of online shopping

In recent years, the volume of transportation has skyrocketed along with the spread of online shopping. In the future, more and more purchases are expected to be made via the Internet.

At the same time, the logistics industry has been forced to reduce the volume of transportation due to the aforementioned background. In order to cope with this increasing logistics volume, the logistics industry is facing a major challenge.

A variety of problems may arise, such as inability to handle an increasing number of packages and delays in transportation. There is concern that service will deteriorate as customers’ needs will no longer be met.

Three solutions to the 2024 problem in the logistics industry

Now that you understand the specific impact and challenges that the 2024 problem will have on the logistics industry, we will now explain the solutions.

Work to secure human resources for young people

Many companies expect to see a decrease in sales and profits due to a decrease in transportation volume as a result of reduced working hours. To prevent the decline, it is necessary to secure human resources. In particular, the percentage of young people in the logistics industry is low, making the securing of young human resources an urgent issue. Young people can work long-term, which will lead to a stable supply of human resources in the future.

To this end, the working environment must be improved with the goal of a de-black industry. Specifically, it is important to solve the problems of long working hours and low income, and to improve benefit packages and create a comfortable working environment.

It is also necessary to motivate young people to work by providing attractive working conditions and career paths, and by making working styles more flexible. In addition, enhancement of education and training programs and introduction of technological innovations should also be considered.

Promoting operational efficiency through the introduction of IT and AI

The use of IT and AI is an important factor in improving operational efficiency. For example, a truck reservation acceptance system can reduce waiting time for cargo, and a fleet management system can improve truck utilization rates.

In addition, the use of AI makes it possible to easily analyze vast amounts of transportation data and derive optimal personnel assignments and delivery routes. This enables efficient business operations and improves the efficiency of the logistics business.

If business efficiency can be improved, issues caused by labor shortages and limited working hours can be resolved. The introduction of IT and AI is indispensable for smooth operation of logistics operations even with fewer working hours.

Make efforts to reduce redelivery

In recent years, many homes have been unattended after package deliveries, resulting in an increase in redeliveries, which has led to excessive truck driver workloads.

To address this problem, it is necessary to promote the use of home delivery boxes and increase the number of locations where they can be received. By introducing delivery boxes, customers can safely leave their packages even if they are not at home when they receive them. Also, by increasing the number of locations where packages can be received, customers will be able to choose where to pick them up at their convenience.

If these efforts can reduce redeliveries, they will reduce truck driver workload and improve efficiency. It would also improve delivery timeliness and customer satisfaction.

summary

One impact of the 2024 problem on the logistics industry is that annual overtime limits will force truck drivers to work fewer hours and reduce the volume of transportation. This may make the traditional logistics business unviable and difficult. Let’s work on measures such as improving working conditions and streamlining operations through the introduction of IT and AI.

In connection with logistics operations, another important measure is to review warehouse operations. In recent years, an increasing number of companies have chosen to build “tent warehouses” as a means of more efficient warehouse operations. A tent warehouse is a building constructed with a steel frame assembled and covered with a sheet membrane. The main advantages are as follows

• low cost
• short-term construction
• Sufficient durability and weather resistance

Tent warehouses are weather-resistant and can keep the inside of a warehouse so bright during the day that lighting is unnecessary. Many advanced manufacturers and logistics companies have introduced this system, and it is expected to be deployed for more efficient warehouse operations and logistics business.

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