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Japan faces major crisis as truck driver shortage looms

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Japan is facing a potential economic and social crisis as the government’s new overtime restrictions for truck drivers take effect in April 2024. The regulations, which limit truck drivers’ annual overtime to 960 hours, are expected to reduce their ability to transport goods and cause a significant shortfall in the country’s freight capacity.

According to Nomura Research Institute Ltd., about 35% of Japan’s cargo will not be shipped in 2030 due to the lack of truck drivers. The impact will be especially severe in rural areas, where up to 40% of the freight may be affected. This could lead to higher prices, lower quality, and delayed delivery of products such as fresh food, electronics, and automobiles.

The shortage of truck drivers is also linked to low wages, long working hours, and poor working conditions. Truck drivers make an average of ¥4.63 million ($34,000) a year on average, which is about 10% below the average for all industries despite working 20% longer hours. They also face high fuel costs, fierce competition, and abuse from some transportation companies.

The government has been trying to address the problem by offering higher wages, subsidies, training programs, and incentives for truck drivers. However, these measures may not be enough to attract and retain enough drivers in the long run. Some experts suggest that Japan needs to reform its logistics system and adopt more sustainable practices such as decarbonization.

The “2024 problem” is a serious challenge for Japan’s economy and society. It requires urgent action from both the government and the industry to prevent a potential collapse of the distribution network that connects manufacturers, retailers, farmers, and consumers.

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