December 2023 | Letter from Hokkaido

Forthcoming caps on overtime in the logistics sector are necessary, but consumers will suffer without a Plan B

Hakodate, Hokkaido - Photo by Zhuoqian Yang on Unsplash

As 2023 comes to a close, Japan is anxiously looking ahead to next year. Not because of North Korean missiles, tensions with China in the Taiwan Strait, or other geopolitical concerns. Nor due to questions about the political future of the unpopular prime minister, Fumio Kishida or speculation swirling round a host of potential successors: Sanae Takaichi, Taro Kono, Shigeru Ishiba, Toshimitsu Motegi, and Yoko Kamikawa.

The main source of concern is far more complicated than dealing with Kim Jong-un or Xi Jinping, or deciding who should be prime minister. It is the 2024 Problem. 

A legal cap on overtime hours in two critical industries - transportation and construction - goes into effect in April. Under the new law, construction workers will not be allowed to work more than 45 hours of overtime per month, or 720 hours/year, except in the aftermath of natural disasters. Truck drivers will not be allowed to work more than 960 hours/year (not including the amount of time they are on break, and a maximum of 15 hours/day).

The new overtime regulations (which will also cover doctors, although the specifics for their overtime cap are still being worked out) were originally agreed in 2019 with the aim of making life easier for serially overworked drivers and construction workers. But they go into force at a time when both industries face severe labor shortages, forcing long hours on those workers who do have jobs.  

For Hokkaido, the April 2024 problem is particularly worrisome. Construction workers account for between 7% and 8% of the prefecture’s workforce. Many are busy in the spring and summer months, repairing streets, roads and highways damaged by the winter snow and ice. As in other parts of the country, they are aging and declining in number. Twenty years ago, Hokkaido had 300,000 construction workers, about 90% of whom were under 65. Today, there are only about 220,000, and only about 185,000 are under 65.   

As a result of the labor shortage, development projects in Sapporo and elsewhere are now on hold or being scaled down. Further delays could come next year, as the restriction on overtime hours will mean fewer available working hours to meet construction demand, even if employers agree to increase wages in the hope of attracting more workers.

But it is the restrictions on overtime hours for truck drivers that could hit consumers hardest. While it is a nationwide problem, it is particularly severe in Hokkaido.

Unlike Honshu – especially between Tokyo and Kyushu, where goods can easily be transported by rail, plane, or on ships serving major ports – Hokkaido’s transportation system relies heavily on roads to get agricultural goods from the prefecture’s remote farming villages to big cities.  

The distances are great. The 400 km journey from Sapporo to the town of Nakashibetsu on the eastern side of Hokkaido takes six hours. And that is on properly maintained roads in decent weather. You can add more time if the route covers minor roads and there are snowstorms. Even getting by truck from cities such as Asahikawa and Obihiro—regional centers that provide corn, wheat, and potatoes to beef and dairy products – to Sapporo or the port cities of Otaru and Hakodate can take almost a day on crowded highways.

Transport and agricultural firms attempting to ship their fresh produce to major markets do not have the easier option of using rail networks. As anybody who has traveled east of Asahikawa knows, train services to the more remote farm and fishing villages in central and eastern Hokkaido, as well as to the far northern tip of the island and along the Sea of Okhotsk, have been cut back or even removed. Truck drivers in much of Hokkaido can’t drop off their cargo off at the nearest train station to be loaded onto a freight train and rushed to Sapporo, to Chitose airport, or to a port city bound for Tokyo, Kansai, or elsewhere. They have to go the distance by road, and, like construction workers, their numbers in Hokkaido are in decline.

A study earlier this year by Nomura research estimated that by 2030, Hokkaido will need just over 30,000 truck drivers. But without policies to encourage more people to become drivers, there will only be about 18,000 drivers in the prefecture by then, compared to 37,000 in Hokkaido in 2015. With the overtime cap - necessary though it is – transporting freight, especially agricultural goods, by truck in Hokkaido over the next few years could become more difficult and expensive. That, in turn, may affect not only the availability of Hokkaido produce in supermarkets nationwide, but also their price.

The government has long been aware of the coming labor shortage, especially in Hokkaido’s agricultural sector. Their solutions, which I saw firsthand years ago at the G7 Agriculture Ministers’ Summit in Niigata, are mostly technical: drones for monitoring crops, self-driving tractors, and so on. I recall the look of mild shock on the face of an agriculture ministry bureaucrat when I asked him if bringing in foreign migrant farmworkers might help. But nobody in Niigata was addressing the issue of how to ensure the crops themselves reached urban markets.

That comes as no surprise. The agriculture ministry is able to brush aside that question by claiming that it is a problem for the transport ministry, while politicians and the tech corporations that back them insist that drones and driverless vehicles are the only solution to Japan’s labor shortage.  

At this stage, it isn’t clear how the 2024 Problem will accelerate efforts to replace human truck drivers in Hokkaido with other solutions. For many, the answer is clear: much higher wages and better working conditions. Failure to attract people who might otherwise choose a different career could determine Hokkaido’s agricultural and economic future.

Eric Johnston is the Senior National Correspondent for the Japan Times. Views expressed within are his own and do not necessarily reflect those of the Japan Times.