HAMAKYOREX CO., LTD.

Many logistics contracts are renewed annually, creating a risk of contract termination at each renewal that could affect business performance and financial condition. As a risk diversification measure, the company maintains a policy of keeping any single client's share of total operating revenue within 10%, and currently there are no major clients accounting for 10% or more. In addition, the company strives to maintain client relationships through "maintaining and improving a trusted logistics system."

If violations such as overloading accumulate, there is a risk of administrative sanctions such as vehicle suspension, business suspension, or license revocation under the Motor Truck Transportation Business Act. Business suspension would have a significant impact on performance. The company holds monthly meetings such as the Safety and Health Committee to thoroughly enforce legal compliance guidance.

Since business locations are concentrated in the Tokai region, a large-scale disaster such as a Nankai Trough earthquake or Tokai earthquake could significantly affect performance due to facility damage and disruption of transportation networks. The company implements preventive measures such as regular disaster drills, seismic reinforcement of facilities, and establishment of emergency communication networks, but the geographic concentration in the Tokai region heightens this risk.

The purchase price of diesel fuel used for business vehicles is affected by fluctuations in crude oil prices and exchange rates, and performance could be affected if prices rise more than expected or if it is difficult to pass on costs through freight rates. It is estimated that a fluctuation of ¥1 per liter in the diesel fuel unit price would result in an annual performance impact of ¥40 million, indicating a clearly quantified cost sensitivity.

The company funds ongoing capital investment for new business locations and vehicle replacement through borrowings from financial institutions, and a rise in market interest rates could affect performance and financial condition. The company is working to reduce interest-bearing debt and shift borrowings to fixed rates, but interest rate risk remains for the variable-rate portion.

Since center operations and transportation management are managed through systems, if a system outage or destruction occurs due to a disaster, computer virus, or similar cause, operations could suffer significant damage. The company implements preventive measures such as virus protection and data backup, but given the nature of logistics operations, a system outage would immediately affect customer service.

In the course of receiving logistics business orders, the company handles clients' confidential information, and if an information leak or data loss occurs, it could damage social credibility and result in claims for damages, affecting performance. The company thoroughly enforces compliance and information management through internal training, but responding to external threats such as cyberattacks remains an ongoing challenge.

The company operates logistics center operations and truck freight transportation primarily handling apparel, food, medical, and daily goods, and a significant downturn in the domestic economy or deterioration in clients' business conditions could reduce the volume of business handled, affecting performance and financial condition. High dependence on specific industries poses a risk that demand fluctuations in those industries directly translate into revenue fluctuations.

If a serious accident or violation occurs during truck transportation on public roads, the company could face lawsuits from victims, a decline in customer and social credibility, and administrative sanctions such as vehicle use suspension or business suspension, affecting performance and financial condition. The company works on traffic safety and accident prevention through regular Safety and Health Committee meetings and employee training, but given the nature of the business involving use of public roads, it is difficult to completely eliminate this risk.

As a labor-intensive business, securing high-quality personnel is essential, and if recruitment does not proceed as planned or mass turnover occurs, performance and financial condition could be affected. The company is promoting active mid-career hiring and converting temporary staff to direct employment, but amid a worsening labor shortage across the logistics industry as a whole, securing personnel has become a structural challenge.