MARUWN CORPORATION

There is a risk that the chronic labor shortage of truck drivers and logistics site workers, which continues to persist, may impede business operations. Due to the "2024 Problem" (tightening of overtime work regulations), restrictions on drivers' working hours have become stricter, raising concerns about reduced transportation capacity and increased labor costs. The Group has adopted a policy of strengthening recruitment, improving working conditions, and enhancing operational efficiency in response.

There is a risk that fluctuations in crude oil prices and the depreciation of the yen may raise fuel costs for trucks, vessels, and other transportation, putting pressure on earnings. Since fuel costs represent a major cost component in the logistics industry, profit margins could decline significantly if price pass-through is delayed. The Group is promoting the use of fuel surcharges and the switch to fuel-efficient vehicles.

The revised Labor Standards Act, effective April 2024, imposes an overtime work cap for truck drivers (960 hours per year), creating a risk of constrained transportation capacity and upward pressure on freight rates. Insufficient response to the regulations could result in the risk of legal violations or difficulty in providing stable services to customers. The Group is advancing the development of its labor management system and reviewing business processes.

There is a risk that logistics demand may decline sharply due to changes in the production and sales trends of major shippers or economic fluctuations. A high degree of dependence on specific shippers or industries means that a downturn in that industry's performance could directly affect the Group's net sales. The Group is working to diversify its client base and develop new customers as its response policy.

There is a risk that cyberattacks or system failures could lead to leaks of customer information and operational data or cause business disruptions. Stable system operation is essential in the logistics industry, and in the event of an incident, there is a possibility of loss of customer trust and liability for damages. The Group continues to strengthen its security measures and provide ongoing employee training.

There is a risk that natural disasters such as earthquakes and typhoons, or the spread of infectious diseases, may damage the logistics network or business sites, making it difficult to continue operations. Disruption of the supply chain could impede the provision of logistics services to shippers, resulting in lost sales and recovery costs. The Group is working to strengthen its response capabilities through the development and training of its BCP (Business Continuity Plan).

There is a risk that stricter greenhouse gas emission regulations and growing demands for carbon neutrality may increase costs associated with switching to EVs and low-emission vehicles and other environmental measures. Delayed response could result in reduced competitiveness, as shippers may require compliance with environmental standards as a condition for continuing business. The Group is promoting the setting of CO2 emission reduction targets and plans to introduce environmentally friendly vehicles.

There is a risk that intensifying price competition with other companies in the logistics industry may lower freight rate levels, thereby deteriorating profitability. In addition to competition from major logistics companies and emerging players, shippers continue to demand reductions in logistics costs, increasing pressure to lower prices. The Group is working to maintain cost competitiveness through the provision of value-added services and operational efficiency improvements.

There is a risk that a delayed response to advances in digital transformation (DX) and automation technologies in the logistics industry could reduce operational efficiency and competitiveness. As technological innovations such as AI, autonomous driving, and warehouse automation accelerate, delays in investment decisions could lead to a decline in medium- to long-term earnings power. The Group is promoting the systematic implementation of system investments and the digitalization of business processes.

There is a risk that compliance violations, fraudulent activities, or deteriorating performance at domestic and overseas group companies could affect the financial condition and creditworthiness of the Group as a whole. Since the business environment and regulations differ among group companies, maintaining a unified governance structure remains a challenge. The Group has established a centralized management system through its Risk Management Committee, based on the "Maruun Group Risk Management Basic Policy" established in April 2025.