Maruzen Showa Unyu Co.,Ltd.

Due to the decline in domestic freight transport volume resulting from the relocation of production bases overseas and the consolidation of logistics operations by shipper companies, receipt rates have continued to decline, intensifying competition. The Group has built information systems for the 3PL Business and provides high-value-added services; however, if the Group falls behind competitors in terms of price or service in the future, it may lose customers, which could affect its business performance and financial condition.

The truck transportation business uses truck fuel (diesel) and tire raw materials (naphtha), and these costs increase when crude oil prices surge. If such cost increases are not adequately passed through to freight rates, the resulting cost increases could directly pressure business performance and affect the financial condition.

While the Group promotes "visualization of safety" through safety and health activities and quality control activities to address the risk of cargo accidents, vehicle accidents, industrial accidents, and the like, there is no guarantee that all accidents can be prevented. If substantial damages arise, any portion not covered by insurance would be recorded as an extraordinary loss, and a decline in sales due to loss of customer trust is also anticipated.

The core systems (the company-wide network, the core logistics system, and groupware) are operated at an outsourcing center, but unexpected disasters, computer virus infections, or unauthorized external intrusions could result in the loss, alteration, or leakage of data. If a system or service outage results in a loss of customer confidence, this could affect the Group's business performance and financial condition.

The Group is subject to a wide range of legal regulations in the course of conducting its logistics business, and addresses these through a Compliance Committee established under the CSR Promotion Council, which is chaired by the President and Representative Director. If business activities are restricted by legal regulations or if legal violations occur, resulting penalties could affect the Group's business performance and financial condition.

If the value of fixed assets held by the Group declines due to a decrease in market value, deterioration in profitability, or other factors, the recognition of impairment losses or similar items could affect the Group's business performance and financial condition.

The Group is expanding its Global Logistics Business with bases centered on Southeast Asia as well as in the United States and Europe, and is exposed to a variety of risks, including deteriorating security conditions due to political upheaval, terrorism, or riots, unforeseen regulatory changes, novel infectious diseases, and sharp fluctuations in exchange rates. Should any of these risks materialize, they could affect the Group's business performance and financial condition.

A significant portion of the Group's sales is derived from business related to manufacturers in the chemical products industry, resulting in a structure in which business performance is heavily influenced by economic trends in that industry and by shipper companies' demands for rationalization. If demand in the chemical products industry weakens or if shippers intensify requests for logistics cost reductions, this could affect the Group's business performance and financial condition.

The Group maintains defined benefit pension plans and lump-sum retirement benefit plans. Should the discount rate used in calculating retirement benefit obligations fluctuate or the investment performance of pension assets deteriorate, this could lead to increased retirement benefit expenses and expansion of unrecognized obligations, thereby affecting the Group's business performance and financial condition.

In addition to the risk of equipment damage and restrictions on electricity and water supply arising from natural disasters such as earthquakes, typhoons, tsunamis, and volcanic activity, as well as man-made disasters such as fires and conflicts, there is also the risk of outbreaks of infectious diseases such as novel influenza and COVID-19. As countermeasures against infectious diseases, the Group has revised its BCP (infectious disease section), established an Infectious Disease Crisis Management Committee, and implemented telework, among other measures; however, should an unforeseen event occur, it could affect the Group's business performance and financial condition.