Toyo Logistics Co.,Ltd.

The items stored and handled by the Group are directly linked to production and consumption activities both in Japan and overseas, and business performance is affected by changes in domestic and overseas economic conditions as well as trends in interest rates and prices. While the Group seeks to diversify risk by pursuing simultaneous growth across different business areas, a deterioration in the macro environment could directly impact sales and profits.

If a claim-related incident occurs in logistics services, it could lead to the incurrence of claim-handling costs and a loss of customer trust. The Group conducts regular education and training for employees, including those at partner companies, to maintain and improve quality, but the risk of accidents occurring cannot be reduced to zero.

The Group has obtained Privacy Mark certification regarding the handling of personal information and continues education and training as well as inspection and improvement of its security systems; however, should an incident occur, it would result in the incurrence of handling costs and issues of trust. As social demands regarding personal information protection continue to rise, maintaining and improving the relevant systems remains an ongoing challenge.

If business sites are damaged by natural disasters such as earthquakes, fire accidents, environmental problems, or the spread of large-scale infectious diseases, this could affect the cargo handled, cause business interruption, and result in costs to restore operations. The Group has implemented measures such as stockpiling supplies, installing private power generation equipment, and securing emergency communication tools at major sites, but depending on the extent of the damage, this could have a material impact on business performance.

The Group's business operations are premised on registrations, licenses, and permits obtained under the Warehousing Business Act, the Trucking Business Act, the Port Transportation Business Act, the Customs Business Act, and other related laws, and revisions to these legal regulations could affect overall operations, including business expansion plans. In phases of business expansion, such as the construction of new logistics facilities, particular attention to regulatory trends is required.

The Group has introduced anti-virus software and firewalls against unauthorized external access and computer virus infections, and has established a backup center at a remote location; however, if an incident such as information leakage or data loss occurs, it could affect business performance. Given the increasing sophistication and diversification of cyberattacks, continued strengthening of security measures is required.

Abnormal weather events, such as an increase in record-breaking extremely hot days and more frequent torrential rains, are already having a concrete impact on the logistics business, and if greenhouse gas emission regulations such as a carbon tax are introduced in the future, this could affect business performance through soaring energy prices. The Group is engaged in environmental conservation activities such as reducing CO2 emissions and positions sustainability as an important management issue.

If it becomes difficult to secure personnel for the logistics business due to a declining working population, this could force an increase in labor costs or a curtailment of order intake, thereby affecting business performance. Against the backdrop of factors such as the so-called 2024 problem, structural labor shortages in the logistics industry are becoming increasingly serious, making continued efforts toward recruitment, retention, and productivity improvement essential.