In Japan, Trucking Causes Price Hikes


Lubricant prices in many markets have risen in recent months, largely due to the past years run-up in crude oil costs. In Japan, oil marketers are raising prices because of a different type of increase in transportation costs – higher expenses for the use of vehicles.

Two companies recently said that they are imposing markups to pass along the impacts of shortages of truck operators combined with changes in trucking labor laws, both of which have affected a wide range of industries.

Idemitsu Kosan Co. and Cosmo Oil Lubricants Co. both said that they will increase prices for finished lubricants and grease effective July 1. Idemitsu will raise prices for all its lubricants and greases by 2,300 (U.S. $21) per kiloliter of lubes or ton of grease. Cosmo will increase its price for lubricants and greases by 1,500 yen per kiloliter or ton.

Both companies cited transportation as the main factor.The main reason for the price increase is the cost of transportation, an Idemitsu spokesman said.

The shortage of drivers and aging drivers in the transportation industry, and the changes in labor laws limiting the number of working hours – like during early morning, late nights and Sundays and public holidays – have led to a necessary increase in the salary of drivers, Idemitsu said in its June 14 press release. Meanwhile, Showa Shell Sekiyu K.K. said licensed dealers will determine lubricant prices for next month.

The Japan Trucking Associations transportation price index reached 121 points in April, a record high and 6 points higher than April of 2017. In a press release, the association said it expects supply of transportation services to remain just as tight and expensive for the rest of the year.

In the future, because of the retirement of drivers, there will be a shortage of truck drivers, and we expect this situation to continue in the long-term, Yoshida Tasuku, a researcher at NLI Research Institute, a think tank of Nippon Life Insurance Co., said in a report in March about the logistics facilities market.

The company said its proprietary distribution cost index has been rising since 2017,and that it jumped to 29 points, just short of the historical high of about 30 points.

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