IR DAY October 13, 2023

Impact of the 2024 Problem and Seino Holding’s
Corporate Value Enhancement Efforts
Seino Holdings Co., Ltd. (9076)

Copyright© 2023 SEINO HOLDINGS CO., LTD. All Rights Reserved.

Introduction
 Based on the Act on the Arrangement of Related Acts to Promote Work Style Reform enacted on April
1, 2019, vehicle driving operations will be subject to an upper limit on the number of overtime
hours worked starting on April 1, 2024.
 We are prepared for the 2024 problem, thanks to efforts made early on to improve driver workstyles
and diversify transportation. At the same time, we believe further measures are necessary in thecharter business area comprising mostly small and medium-sized operators.

 Reducing driver working hours will require industry-wide increases in utilization rates per truck and thediversification of transportation methods, making industry-wide cooperation and collaborations
essential.
 We also consider the collection of appropriate freight rates to be an ongoing issue in terms of
ensuring that customer prosperity is maintained and the industry grows appropriately ― namely,
avoiding the risk of transportation disruptions.
 Under the slogan Team Green Logistics, we will continue to support Japan's logistics industry by
opening our logistics infrastructure to Less than Truckload and charter businesses and by
taking the lead in solving the industry-wide 2024 problem.
2

Copyright© 2023 SEINO HOLDINGS CO., LTD. All Rights Reserved.

Contents

3

01

Logistics Industry 2024 Problem Overview

02

Seino Group Response

03

Industry Response

04

Shipper Response

05

President’s Message

Copyright© 2023 SEINO HOLDINGS CO., LTD. All Rights Reserved.

01
4

Logistics Industry 2024 Problem Overview

Copyright© 2023 SEINO HOLDINGS CO., LTD. All Rights Reserved.

Current Status of Truck Drivers～Underlying Factors for Long Working Hours～
The 2024 problem resulting from efforts to reduce long working hours has
ameliorated burdens on drivers, but increased the risk of transportation disruptions
Truck Driver Annual Work Hours Comparison

Comprising mainly short-distance transportation, theSmall/medium
truck drivers

2,484

number of hours worked per day are short, but a lackof drivers means fewer days off
Comprising mainly long-distance transportation, theLarge truck
drivers

2,544

number of hours worked per day are long, andconsecutive hours of rest are short

Overallindustry

2,112

average

Source: 2021 Basic Survey on Wage Structure, Ministry of Health, Labour and Welfare of Japan.

5

Copyright© 2023 SEINO HOLDINGS CO., LTD. All Rights Reserved.

Current Status of Truck Drivers～Freight Rate Levels and Income～In the BtoB area, freight rates have remained low even after the pandemic due to a decreasein transportation demand caused by inflation and other factors, and as a result, driver annual
income remains low
Contracted Freight Rate Index (FY)[2019 = 100]

Truck Driver Annual Income (tens of
thousands of yen)102

中小型トラック
Small/medium

100

4 tons orless, 97.0

運 truck転drivers
者

431

98
Overall,
95.6

96

大 型Large
ト ラ truckック
運

転 drivers
者

463

94
4 tons or more,
94.1

92
90
2019
2019年

2020
2020年

2021
2021年

2022
2022年

489

2023
2023年

Source: Japan Trucking Association

6

Overallindustry
average

全 産 業 平 均

Source: 2021 Basic Survey on Wage Structure, Ministryof Health, Labour and Welfare of Japan.
Copyright© 2023 SEINO HOLDINGS CO., LTD. All Rights Reserved.

Risk of Transportation Disruptions
Due to Increased Driver Shortages
Driver numbers are trending down after peaking in 1995, and will continue to decline going forward against
the backdrop of an aging population. Overtime restrictions add to the risk of transportation disruptions.
Estimated number of road freight transport
drivers (thousands of people)
1200

980

1000

973
881

838
800

784

726

767
662

644

578

600

519

400

200

0
1980

1985

1990

1995

2000

2005

2010

2015

Actual

2020

2025

2030

Forecast

Source: Japan Institute of Logistics Systems “Logistics Concept 2030” 2019 Survey

7

Copyright© 2023 SEINO HOLDINGS CO., LTD. All Rights Reserved.

Driver Working Hours
Will Be Reduced from April 2024
On April 1, 2024, the Act on the Arrangement of Related Acts to Promote Work Style Reform
will go into effect, reducing the maximum number of overtime hours worked and necessitating
the implementation of countermeasures. In the event these restrictions are violated,disciplinary actions will be enforced.

Pre-revision

Post-revision

Up to March 2024

From April 2024

Working hours(1 year)

In principle, up to

Working hours(1 month)

In principle, up to

3,516 hours
293 hours

In principle, up to

3,300 hours

In principle, up to284 hours

Working hours(1 day)Up to 13 hours

Up to 13 hours(Max 16 hours/15 or more hours limited toaround twice per week)(Max 15 hours/14 or more hours limited toaround twice per week)

Rest hours

8 consecutive hours or longer

In principle,
consecutive hours,
no fewer than 9 hours

11

Source: Ministry of Health, Labour and Welfare “Improvement Standards Notification Revisions”

8

Copyright© 2023 SEINO HOLDINGS CO., LTD. All Rights Reserved.

Conventional Transportation Methods
Are Not Viable for Logistics in JapanThe 2024 problem will result in a 14.2% (400 million ton) shortage in transportation capacity, and worsening
supply shortages will result in a 34.1% (940 million ton) shortage of transportation capacity in 2030

Insufficienttransportation
capacity

Annual working hours (FY2019 survey results)

3,840

Annual working
hours

Insufficient transportation capacity
ratio: Approx. 14.2%

Over 3,300 working
hours

3,516

→ Approx. 400 million tons
3,300

Drivers(Composition ratio)
73.4%

Under 3,300 hours

3,300–3,156 hours

22.3%

3,516–3,840 hours

4.0% 0.4%

Over 3,840 hours

Source: Created based on the Ministry of Health, Labour and Welfare 2021 Fact-finding Survey Report on Truck Driver Working Hours

9

Copyright© 2023 SEINO HOLDINGS CO., LTD. All Rights Reserved.

What Is Needed to Reduce Driver
Working Hours
Rectifying driver working hours necessitates reduced driving times (distances),

as well as reductions in time spent waiting for, loading, and unloading cargo.
Driver working hours

Inspection, muster

Driving time

Cargo wait time

Loading and unloading time

Incidental work, etc.

Rest time

0:24

Average value for
operations withwaiting time(n = 315)

0:16
Working hours

6:43

Driving time reduction

1:34

1:29

1:58

▶▶▶

12:26

Waiting and cargo handling time reduction

Source: Ministry of Land, Infrastructure, Transport and Tourism “Fiscal 2020 Truck Transportation Conditions Survey Results (Full Report)”

10

Copyright© 2023 SEINO HOLDINGS CO., LTD. All Rights Reserved.

02
11

Seino Group Response

Copyright© 2023 SEINO HOLDINGS CO., LTD. All Rights Reserved.

Impact of 2024 Problem
on Less than Truckload Operators
Less than Truckload operations, where major carriers have a high share of themarket, involves relay-style transportation methods, and measures are alreadyunderway to reduce working hours through the use of modal shifts and transit points.

Less than Truckload method and issues

Regarding pickup and delivery, major issue is
use of holidays due to manpower shortage

Trunk line

Collection

Depot

Depot

Loading
Requires ingenuity in loading
methods to accommodate anunspecified number of loads ofvarious shapes and sizes

12

DeliveryOperation(transportation)
Long-haul courses pose achallenge in terms ofexcessive daily restraints

Unloading
Requires ingenuity in unloading
methods, as cargo must be sorted
according to direction and delivery
destination
Copyright© 2023 SEINO HOLDINGS CO., LTD. All Rights Reserved.

Seino Group 2024 Problem Countermeasures～Taking Action Early～
Efforts to dateSeino
autonomous
response

Medium term｜~５years

Long term｜５years ~ Increased operating efficiency
through company integration
 Separation of cargo handling Transportation diagramming

 Establish locations specializing in relay transportation (One for Kyushu
launched in October 2023)(Controllable) Promotion of DX
 Promotion of logistics
 Retention and recruitment in anticipation of labor shortages

Industrycollaborations
Negotiations
with customers






Modal shifts
Receive appropriate freight rates
Develop Green Logistics through promotion of open public platform (O.P.P.)
Use drone technologies in depopulated areas(Partiallycontrollable)
Dependence on
external
environment(Uncontrollable)13 Free up Seino infrastructure (shared use of relay points in chartered areas, etc.)
 Diverse, One Stop transportation via transportation system linkage

Various regulations

Autonomous driving (in formation)
Hydrogen stands
System for accepting foreign drivers

 Low birthrate countermeasures Energy countermeasures

Copyright© 2023 SEINO HOLDINGS CO., LTD. All Rights Reserved.

Promoting Initiatives in Various Aspects

We have already responded to legal revisions associated with the 2024
problem by revising transportation methods and cargo handling systems

Separation ofcargo handling

Separation ofcargo handling

Two trucks one
driverDelivery center(delivery center tostop by)

Collection
centerScheduled operations(Diagramming)

Collection
14｜
Long distance
operations｜

DeliverycenterModal shifts

Trunk line

Jointdeliveries

Delivery
Copyright© 2023 SEINO HOLDINGS CO., LTD. All Rights Reserved.

Promoting Diagrams Createsa Virtuous Cycle

The introduction of diagrams in April 2018 has stabilized departure times. As a result, the time cargo is heldfor departure was reduced and arrival times have also stabilized, contributing to the efficiency of unloading
systems.

Client pursuit of workstyle reforms matches our need for on-time operations, enabling the use of diagrams toquickly take root.

19:30 Departure
Departurepoint

20:00 Departure
20:30 Departure
Arrivalpoint

All departure times are
diagrammed
15

Arrival times can be forecast,facilitating unloading preparations
Copyright© 2023 SEINO HOLDINGS CO., LTD. All Rights Reserved.

Higher Efficiency Using Various
Trunk Line Transportation Methods
40% of transportation further than 600 km is transported without using trucks,
contributing to reduced CO2 emissions
Modal shift to rail transportation using partially chartered trains

Kangaroo Liner

ShiftedKangaroo Liner SS60

304 large trucks’ worth

Kangaroo Liner NF64

Accelerated quickly with the introductionof dedicated trains starting in 2018.

Modal shift to marine transportation

Since 2019, shifted

10 trucks’ worth

Suita (Osaka) ～ Koriyama ～ Sendai

Nagoya ～ Fukuoka

Kangaroo Liner TF60
Tokyo ～ Fukuyama (Hiroshima)
Etc.

RORO ferry

・Shimizu ～ Oita
・Ariake (Tokyo) ～ Kanda (Fukuoka)
・Tokyo ～ Naha・Tsuruga (Fukui) ～ Hakata
・Osaka ～ Oita
・Yokosuka ～ Shinmoji

Introduction of double trailer trucks in response to driver shortages

5 courses in operation
Double trailer truck

16

・Komaki ～ Fujieda
・Nishi-Hiroshima ～ Himeiji
・ Nishi-Hiroshima ～ Fukuyama
・ Nishi-Hiroshima ～ Shinmei＋Joint operations with other companies

Copyright© 2023 SEINO HOLDINGS CO., LTD. All Rights Reserved.

Two Trucks One Driver Operations
on Trunk Lines Leveraging Our Strengths
Maximally leveraging strengths including our format of multi-location delivery in single operations and large vehicle
fleet, and separating cargo handling and driving duties, we are able to operate with fewer staff.
Does not require a towing license, there are no gender or age restrictions due to the separation of cargo handling, andprovides a high degree of freedom in operating routes.
Depending on the distance traveled, further efficiency improvements are underway, including one driver per three,four, or five trucks.

Ex: Two trucks one driver operations

Truck A

(Trunk line operation of two large trucks by one
driver)Promoting cargo

Center A

Trunk line operation of two large
trucks by one driver

handling separation▼
Achieves maximum efficiency

Center B

operations within driver time
constraints
Truck B697 large trucks operated by 313 drivers

Simplified cargo unloading withunit transportation
2 trucks 1 driver
3 trucks 1 driver17

261 courses
38 courses

4 trucks 1 driver
5 trucks 1 driver

9 courses
5 courses

Reduces unloading time by unloadingcargo in units
Copyright© 2023 SEINO HOLDINGS CO., LTD. All Rights Reserved.

Example of Joint Deliveries
Aimed at Reducing Wait Time at Delivery
Destinations
Conducting joint transportation with Fukuyama Transporting, which faces common issues (painpoints) caused by long wait times for cargo at delivery destinations, we contributed to reducing
wait times by more than one hour and easing cargo acceptance at delivery destinations.

Previous deliveries

Joint deliveries launched in May 2013

Deliverydestination A

Fukuyama
Transporting
destination depot

Each is delivered tothe same destination

Seino destination
depot

Fukuyama
Transporting
destination depot

Deliverydestination A

LiaiseDeliverydestination B

Seino destination
depot

Deliverydestination B

Improving logistics efficiency and maintaining a sustainable, nationwide network
18

Copyright© 2023 SEINO HOLDINGS CO., LTD. All Rights Reserved.

Using O.P.P. to Provide Logistics Infrastructure
to a Wide Range of Other Companies
Providing 2024 problem countermeasures to other companies in our industry andassembling partners to achieve Green Logistics
Brought to nearby Seino
location

Brought directly from
replay depot

O.P.P.

O.P.P.

About the Kita-Osaka
Hub Center
CustomerSame industry
company A

Same industry
company B

Consignment
deliveries fromother companies•

Facility specializing in relay transportation
mainly to Kyushu that commenced

operations in October 2023.

Brought in fromother companies

Brought in fromother companies•
Seino deliveries
CustomerThis specialization strengthens
transportation capacity, increases
operational efficiency, and realizes Green
Logistics by accepting products from other

Seino

Seino Kyushu

Seino Kita-Osaka

companies in the same industry as well as
regional companies.

Originating
depot

Conventional
trunk line operation

Relay
depot

Cargo
transferred torail containersRailtransportation

Reference: Capacity 700 tons/day
Destination
depot

Open Public Platform (O.P.P.)
This concept involves building a logistics platform that is collaborative (open) and can be used by everyone (public), within and outside the Company, regardless ofindustry category or other differences, to improve the efficiency and value of each platform user, and contribute to industry, the environment, and people's lives as social
infrastructure.

19

Copyright© 2023 SEINO HOLDINGS CO., LTD. All Rights Reserved.

Human Capital Strategy: Achieving Well-Being =Satisfying Our Management Philosophy

We define well-being as “our employees’ sense of fulfillment, job satisfaction, and personal
growth.” We believe that enhancing employees’ well-being will improve retention and give us
an advantage in recruitment.

Management philosophy:“Develop the company and make employees happy”

Results ofachievingwell-being(1) Increased retention(2) Enhanced recruiting
capabilities

Achieving well-being: Greater engagement

Basis forachievingwell-being

20(3) Personal growth(4) Fostering a sense ofunity among employees

Copyright© 2023 SEINO HOLDINGS CO., LTD. All Rights Reserved.

Efforts to Increase Retention→ Introduction of group system for drivers
Strengthens cooperation and collaborations, contributes to workload leveling and stable acquisition of holidays→ Position change system
Ensures stable supply of large truck drivers, who are difficult to recruit, by placing importance on a path
progressing from pickups and deliveries to route driver→ Stock ownership plan expansion
Enhancements to the employee stock ownership plan so that increased corporate value = economic
value for employees→ Licensing acquisition support system
Contributes to driver retention by partially covering the costs associated with lifting restrictions on driver's

licenses→ Refresh One paid leave
Contributes to employee retention in first year of employment by offering consecutive paid leave after the firstyear of employment→ Fostering camaraderie through Company sports
Creates a sense of unity among employees through support for the Seino baseball and karate clubs
21

Copyright© 2023 SEINO HOLDINGS CO., LTD. All Rights Reserved.

Toward Even Higher Retention
We are promoting initiatives based on our management philosophy aimed atrealizing comfortable and rewarding workplaces and employee well-being

Indicators emphasized in the engagement survey

Average number of years employedSeino

17 years

Transportation

My income is commensuratewith my performance.

50.3%

Transportation and12.6 years

postal services

I have no concerns

72.0%

about the future.
Attrition rates
I have a sense
Seino
Transportation

6.8%

I feel pride
Transportation andpostal services

22

69.6%

of self-esteem.

14.2%

in my work.

50.3%

Source: Ministry of Health, Labour and Welfare “2021 Survey on Employment Trends: Hiring and Resignation Rates
by Industry” and “2022 Basic Survey on Wage Structure”

Copyright© 2023 SEINO HOLDINGS CO., LTD. All Rights Reserved.

Ongoing Issue: Collecting
Appropriate Freight Rates


Costs associated with addressing the 2024 problem are increasing, and although there is alimit to how much companies can do, these costs have yet to be fully passed on.

As with the 2017 home delivery crisis, the 2024 problem may manifest itself in the next year orlater, and the industry may see a rapid pivot toward an emphasis on prices.



We will promote the collection of appropriate freight rates premised on contributing to theprosperity of our customers through the provision of added value.
Price increase due toskyrocketing cost of materials

Price index trends
130

Prices increased
during delivery crisis

Home deliveries

120

General construction
deflator

110

Road freighttransport

90

Potential increase

Jan. 2015
Mar. 2015
May. 2015
Jul. 2015
Sep. 2015
Nov. 2015
Jan. 2016
Mar. 2016
May 2016
Jul. 2016
Sep. 2016
Nov. 2016
Jan. 2017
Mar. 2017
May 2017
Jul. 2017
Sep. 2017
Nov. 2017
Jan. 2018
Mar. 2018
May 2018
Jul. 2018
Sep. 2018
Nov. 2018
Jan. 2019
Mar. 2019
May 2019
Jul. 2019
Sep. 2019Nov. 2019
Jan. 2020
Mar. 2020
May 2020
Jul. 2020
Sep. 2020
Nov. 2020
Jan. 2021
Mar. 2021
May 2021
Jul. 2021
Sep. 2021
Nov. 2021
Jan. 2022
Mar. 2022
May 2022
Jul. 2022
Sep. 2022
Nov. 2022
Jan. 2023
Mar. 2023
May 2023

100

Source: Bank of Japan Corporate Services Price Index, Ministry of Land, Infrastructure, Transport and Tourism Construction Cost Deflator

23

Copyright© 2023 SEINO HOLDINGS CO., LTD. All Rights Reserved.

03
24

Industry Response
Copyright© 2023 SEINO HOLDINGS CO., LTD. All Rights Reserved.

Trucking Industry Overview
Comprised primarily of SMEs and small companies engaged mainly incharter businesses
Cargo vehicle transport operators
Large corporations(301 or more employees)

1％

Share of domestic cargo trucking

Small companies(20 employees or less)

73％

SMEs
(21–300 employees)

Privatetransport

Chartertransport

33%

63%

26％
Domestic cargo
trucking tonnage

3,888
million tons

Less than
Truckload

Source: Ministry of Land, Infrastructure, Transport and Tourism

25

4%
Copyright© 2023 SEINO HOLDINGS CO., LTD. All Rights Reserved.

Significant Impact
on Charter Business Operators
The problem of hours worked per day and month on long-distance routes
within charter transport will result in a shift to shorter distancetransportation routes, which may result in lower income.
Charter Transport Flow and Issues

Transporter
depot

Recipient

Shipper

Loading
Loose cargo andunloading operations
increase time restraints

Operation(transportation)
Driving distance depends
on loading/unloading time

Transporter
depot

UnloadingWait times depend on
shipper/recipient circumstances,
extending work hours

Charter transport is based on self-containment, with one driver loading and delivering goods
26

Copyright© 2023 SEINO HOLDINGS CO., LTD. All Rights Reserved.

Long Working Hours are an Issue
in Long-distance Charter Transport

FeatureJapanese business practice is to ship in the evening and deliver the goods the next morning, with operations often
conducted at night, what is known in long-distance transportation as three-day (1 night,3 days) service.

Issues・Long operating and cargo waiting/unloading times make for long working hours.
・Break times are irregular.
・Must ensure 11 consecutive hours of rest in principle (no less than nine hours).

Long working hours
are an issue

Day 1

15:00 Depart

Sales office

8:00 Delivery
Day 2
Day 3
27

Kanto recipient

8:00 Delivery

Kansai recipient

Consecutive breaktime is an issue

Break time

16:00 Loading

Kansai pickup

Transport

16:00 Loading

Kanto pickup

Transport

10:00 Return

Sales office

Truck driver daily
workflow
Copyright© 2023 SEINO HOLDINGS CO., LTD. All Rights Reserved.

Building a Sustainable Logistics Model
Path forward

Long-distance transportation is difficult, and the need for relay transportation is expected to increase Opening Seino Group logistics infrastructure as relay centers, connecting businesses with

Seino initiatives
and future issues

HACOBELL digital technologies
 Ensuring convenience is an issue, including facilitating settlements between businesses

Seino logistics infrastructure

Distribution centers:

736 bases

Digital platform

13,000 businesses
Registered trucks: 38,000 trucks

Registered businesses:

HACOBELL INC.～Inventing the Next in Logistics～
Aug. 2022
Shareholders

28

Joint venture established

Business Details

50.1%: Seino Holdings Co., Ltd.
49.9%: RAKSUL INC.

 HACOBELL, a logistics DX platform management service
 HACOBELL Cargo, a cargo shipping and vehicle matching service
 HACOBELL Delivery Vehicle Management, a one-stop DX solution fordelivery vehicle operations
 HACOBELL Supporter Program, a service providing total support fortransportation operator business environments
Copyright© 2023 SEINO HOLDINGS CO., LTD. All Rights Reserved.

Using Transportation Infrastructure
as Relay Points
Opening up our logistics and digital infrastructure to reduce
working hours and ensure consecutive break time
Changes in truck driver daily workflow

Before(Assuming transportation from Tokyo to Okayama)
Excessive work hours

16:00 Loading

Day 2: 5:00 arrival～ 8:00 delivery

800 km transport
Tokyo shipper

Okayamarecipient
Use separate
HACOBELL truck

Day 2: 2:00 unloading

After

16:00 Loading

600 km transport
Tokyo shipper

Kansai relay pointBreak

200 km transport

Ensures consecutive
break time

Okayamarecipient

Day3: 8:00 delivery
HACOBELL handles
return shipment

Tokyo recipient

29

600 km transport

Day 2: 16:00 Loading
Copyright© 2023 SEINO HOLDINGS CO., LTD. All Rights Reserved.

Aiming for the

Realization of a Physical Internet
Connect transportation data held by customers and companies in the transportation services
business on a digital platform, and contribute to the efficiency of the entire logistics industry
with assets that can be openly utilized, such as relay centers.
Liberate assets

Strengthen ties withpartner companies

Share information quickly

Increase loading ratios

Fewer people, more efficiency, more Green30

Copyright© 2023 SEINO HOLDINGS CO., LTD. All Rights Reserved.

Developing Green Logistics Transcending
Industry and Company Boundaries

Green
Achieving a worldview based oncleaning the air, rather than moving it
 Contribute to the efficiency of the entire
logistics industry by integrating,matching, and sharing digital andphysical resources Build an environmentally friendly logistics
ecosystem

One Stop
Stress-freeconvenience Build a digital platform thateasily connects with peers andother industries
 Provide customers with supply
chain optimization

31

Customerprosperity

SupportWorking on behalfof customers to
reduce pain points
 Help address the hassles
customers face in peripheral
areas, from a logistics
perspective
 Support management so
customers can focus on theircore businesses

Copyright© 2023 SEINO HOLDINGS CO., LTD. All Rights Reserved.

Last Mile Delivery Issues

External environment

expanded rapidly, with a substantial increase in sole
proprietorships
Redelivery rates

Since around 2017, the e-commerce market has
18.0%

15.5%

16.0%

Redeliveries are frequent
14.0%

Issues and future pointsCompared to intercompany logistics, house frontage
cases are frequentPotential problems with long working hours due to

11.4%

11.8%

12.0%
10.0%
8.0%

6.0%

factors including driver shortages and redeliveries

4.0%

In depopulated areas, there is a shortage of drivers

2.0%

and it is difficult to secure large volumes of cargo,

0.0%
17/10

18/10

19/10

20/10

21/10

22/10

resulting in chronic unprofitability

The key is how we structure sustainable last mile logistics
Source: Ministry of Land, Infrastructure, Transport and Tourism “Handling Results of Home Delivery Service, etc.”32

Copyright© 2023 SEINO HOLDINGS CO., LTD. All Rights Reserved.

Transportation Methods that Reduce Burdens
on Drivers and the Environment

OCCO unattended delivery service

Post-in service Konipos

FeaturesFeatures

Joint venture established with major e-commercecompany Felissimo

Consolidates and slows trunk line transportation



Local residents make deliveries in their spare time andleave packages unattended, eliminating redeliveriesConsumers receive T-points

Delivery service utilizing Green (deliveries
combining walking and driving) & Slow (maildelivery infrastructure) logistics

Small package post-in service withapproximately 10,000 Group Green Delivery
personnel

Moving toward new methods that reduce labor shortages and facilitate sustainable transportation
33

Copyright© 2023 SEINO HOLDINGS CO., LTD. All Rights Reserved.

Depopulated Area Logistics Model

Commenced deliveries in the villages of Kosuge and Tabayama, Yamanashi
Prefecture, in conjunction with a Less than Truckload logistics company

Joint delivery flowchart［Small lot delivery］

Tabayama

NEXT DELIVERY
DepartArrive9:45 → 12:00
KosugeSeino Transportation
Kofu branch

DeadheadFugaku Express
Tsuru branch

FugakuExpress

Kosuge depot［Large lot］

KosugeFugaku Express
Fukuyama
Transporting
Tsuru office

Bring in (Kosuge/Tabayama)

9:00～9:30

Tabayama

Relay joint deliveries and drone deliveries make logistics sustainable in depopulated areas
34

Copyright© 2023 SEINO HOLDINGS CO., LTD. All Rights Reserved.

CVC Initiatives Implemented Before
Industry Peers
2019

CVC established (JPY7.0bn)

2023

New CVC established (JPY10.0bn)
Invests in startups thatprovide value in the logistics
area and throughout theentire value chain.

Promoting the new smart logistics SkyHub®
in cooperation with local governments

35

Copyright© 2023 SEINO HOLDINGS CO., LTD. All Rights Reserved.

04
36

Shipper Response
Copyright© 2023 SEINO HOLDINGS CO., LTD. All Rights Reserved.

Impact of the 2024 Problem on
Shippers
1．Business (sales) structure revisions

Risk of lost sales

The risk of becoming unable to provide current
lead times will force sales structure revisions,

including the extension of lead times

2．Operational structure revisions

Risk of increased costs

In addition to direct freight rate increases, tomaintain current lead times, shippers will beforced to revise their operational structure,including shipping ahead of schedule, revisingproduction and inventory bases, and assistingwith transport operator cargo handling work
(increasing burden on people)

What needs to be done to help solve your problems?
37

Copyright© 2023 SEINO HOLDINGS CO., LTD. All Rights Reserved.

Logistics Promotion is Key
to Issue Resolution
Undertaking logistics from the upstream, we reduce the risk of customer
inability to transport with our logistics

Competitiveness

Carrying capacity based on nationwide transportation network

Nationwide operations is an advantage enabling us to provide

Logistics｜Sales

Targeting a 100% (2x)level of growthlogistics services utilizing optimal locations
Abundant human resources, from dedicated salespeople toApprox.
JPY60.0bn*

operational and management personnel
Integrated distribution centers and truck terminal facilities enable
customer inventory to be directly connected to our nationwide
network

Contributes to lead time andtotal cost reductions
38

18.03

23.03

5 yearslater
5年後*Reference figures for Seino Holdings (management accounting
basis), including transportation operating revenue derived fromlogistics.
Copyright© 2023 SEINO HOLDINGS CO., LTD. All Rights Reserved.

Logistics Infrastructure Strengths
Strengthening logistics infrastructure capabilities through proactive investments inlogistics infrastructure and the proactive use of external facilities
Inventory holdings image＜Warehouse floorspace＞

Capital investment［Cumulative from FY03/11, indexed］

当社
Seino

2,954

陸運業
Overland transport

Targeting 85% (1.85x)
level of growth

2,093
28% growthMore robust investment
than industry peers

External
warehouses*Approx.
400,000 ㎡*Approx.
620,000 ㎡

Seinowarehouses

100
FY03/10

FY03/23

Source: Ministry of Finance Company Statistics Survey

39

FY03.20

FY03.23

5 years
later
5年後*Warehouse floorspace within Seino Holdings
Copyright© 2023 SEINO HOLDINGS CO., LTD. All Rights Reserved.

Intangible Asset (IT System Architecture)
Strengths
Enhancing logistics operation efficiency and resolving labor shortage issues
through the provision of robots and inventory management systemsGroup company Seino Information Service supports customer logistics efficiency in the logistics field
Provides logistics solutions tailored to each customer’s operating environment

Robot introduction example and implementation efficacy

GTP

t-SortAutomated receiving and shipping work

Automated sorting robot

Robot efficacy(Company A, healthcarerelated industry)
Warehouse staff

15% reduction

Installed 90 t-sort units with 350 chutes at the Ryugasaki
branch40

Copyright© 2023 SEINO HOLDINGS CO., LTD. All Rights Reserved.

Measures Taking a Broad View
of Total Costs is Key
Logistics costs as a percentage of sales are said to range from 5% to 8%, but the logistics unit
costs may rise sharply as the 2024 problem becomes more apparent

Fiscal 2022 logistic cost composition

Handling
costs
荷役コスト

18%
18%

It is important to address risingtransportation costs with overall
optimization

保管コスト
Storage
costs

17%
17%
Personnel,
人件費・事務費等
administrative
costs

輸送コスト

Transportation
costs

55%

55%

梱包コスト
Packaging
costs

6%

6%

Seino logistics provide customers withsupport reducing overalllogistics costs

4%

4%

41

Source: Japan Institute of Logistics Systems Fiscal 2022 Logistics Cost Survey Report
Copyright© 2023 SEINO HOLDINGS CO., LTD. All Rights Reserved.

Resolving Customers’ Logistics Issues

In handling logistics, Seino enables its customers to focus on
their core business, which contributes to their prosperity.

Osada Co., Ltd. Interview Excerpt
42

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To Resolve the 2024 Problem,
We Need to Encourage Shippers
to Take Action
As shippers have little awareness of the 2024 problem, their understanding andcooperation is essential for resolving it
Corporate/business awareness of the 2024 problem

Transportationindustry

Seino
core
customerindustry
average

Corporate/business efforts
to resolve the 2024 problem

Aware of problem

Unaware of problem

Promoting efforts

Not promoting efforts

92.3%

7.7%

62.3%

37.7%

77.3%

22.7%

47.8%

52.2%

Note: Compiled from a quantitative survey of businesses (438 manufacturing companies, 876 transportation companies, 208 wholesale/retailcompanies, and 185 other companies) conducted by the Ministry of Land, Infrastructure, Transport and Tourism in October 2022.

43

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Cooperation Among Shippers, Transport Operators,
and Public Agencies is Essential

Individual business responses are limited

It is critical to build a platform that can be used by businesses

To ultimately resolve the 2024 problem

Shippers, transport operators, and public agencies
working together is key to resolving these issues
44

Copyright© 2023 SEINO HOLDINGS CO., LTD. All Rights Reserved.

Policy Packages
Supporting Logistics Innovation

A package of policies targeting logistics innovation was decided at a ministerial meeting held in June 2023

Further, to achieve results ahead of plan, a logistics innovation emergency package (plan) was announced

Policies targeting logistics efficiency (excerpt)

Logistics GX
promotion～Modal shift,
EV trucks～

Efforts toeliminate
redeliveries

Promotion of joint
transportation inregional logistics,
etc.

Utilization anddevelopment of adiverse range ofhuman resources
including womenand young people

Logistics DX
promotion～Cargo and vehicle
request system, dronedeliveries～

Future actions

Until end-2023

From 2024

Revision of standard conditions ofSpecification of regulatory measures,
including the enactment of legislation at
the ordinary session of the Diet

rates and carriage, etc.

Promoting the realization of sustainable logistics with Team Green Logistics
45

Copyright© 2023 SEINO HOLDINGS CO., LTD. All Rights Reserved.

Seize Opportunities
to Address the 2024 Problem
and Achieve Roadmap 2028
Aim to achieve ROE of 8.0% within 3-5 years by improving earning
power and actively promoting shareholder returns
Drivers of ROE improvement

1
2

3
4

Steady growth of the Less than Truckloadbusiness
Growth of the logistics business

Operatingrevenue growth
Organic growth of around
4%/year + M&A

Growth of the charter business

ROE of 8.0%
or higher

M&A and open innovation

1

Increase profitability through better
efficiency in the Less than Truckloadbusiness

2/3

Increase the proportion of operating
revenue from the highly profitable logistics
and charter businesses

5

Maintain DOE of 4.0% or more and continue
to steadily acquire treasury stock (¥30.0bn
acquisition planned for FY03/24)

Achieve both economic
and social value

Improved
profitability
Operating margin of around
5.8% (4.5% in FY03/23)

Grow Operating income
by 10% or moreannually
Grow EPS by
15-20% annually

Capital policies
Equity ratio to an appropriate
level (63.2% in FY03/23)

46

Copyright© 2023 SEINO HOLDINGS CO., LTD. All Rights Reserved.

Consistency Between Solutions
to the 2024 Problem and Roadmap 2028

Specific measures aimed at overcoming the 2024 problem
Drivers of ROE improvement
Steady growth of the Less than Truckloadbusiness

 Improves convenience through system integration (O.P.P.) with industry peers
 Ensures cargo volumes through logistics leveraging carrier advantages

Growth of the logistics business Develops problem-solving logistics leveraging unused space at industry peer facilities(Mitsukaru Soko) as well as the advantages of nationwide expansion

Growth of the charter business Expands quality-assured use of transportation through a digital platform utilizing
HACOBELL

M&A and open innovation

Increase profitability through better
efficiency in the Less than Truckloadbusiness Achieves operational efficiencies through company integration, as well as modal shifts,
relay transportation, and reducing working hours by promoting the separation of cargohandling

Increase the proportion of operating
revenue from the highly profitable logistics
and charter businesses Creates value by visualizing transportation companies meeting operational standards
 The addition of charter relay bases to the hub concept increases facility turnover

Maintain DOE of 4.0% or more and continue
to steadily acquire treasury stock (¥30.0bn
acquisition planned for FY03/24)

47

Capital policies

 Promotes ESOP

Copyright© 2023 SEINO HOLDINGS CO., LTD. All Rights Reserved.

05
48

President’s Message
Copyright©
Copyright© 2023
2022 SEINO
SEINO HOLDINGSHOLDINGS CO.,CO., LTD.
LTD. AllAll Rights
Rights Reserved.
Reserved.

President’s Message

 Although the 2024 problem discussed today is a major social issue, we will carry forward the social
contribution aspirations and thoughts of our founder, Rihachi Taguchi, who launched long-distancetransportation in 1946, to contribute to society, and promise to do everything in our power to resolve thisissue in a way that avoids disruptions to logistics, the lifeline of the Japanese economy, and contributes
to the creation of value for all our stakeholders.
 The resolution of logistics issues requires One Stop information and infrastructure, and I am proudthat Seino was ahead of other companies in terms of promoting investments in human resources,

infrastructure, and DX, while proactively engaging in collaborations with other companies. We
made particular efforts to retain employees under the management philosophy “Develop the company
and make employees happy.” We believe the value of our human assets will become increasingly
important in the coming years.

 To draw on the collective wisdom of multiple stakeholders, including shippers, transportation companies,
consumers, and shareholders, and create a sound and sustainable future, shippers, transportationcompanies, and public agencies must work together to examine optimal logistics structures andappropriate freight rate levels. To this end, I hope to engage in a frank exchange of opinions with all

our stakeholders.
49

Copyright© 2023 SEINO HOLDINGS CO., LTD. All Rights Reserved.

Appendix
50

Copyright©
Copyright© 2023
2022 SEINO
SEINO HOLDINGSHOLDINGS CO.,CO., LTD.
LTD. AllAll Rights
Rights Reserved.
Reserved.

Creating together and contributing to the future

We need to optimize sustainable logistics networks in order to address the social
issues facing Japan: a declining birthrate, an aging population, and environmental
problems.
Based on the concept of an open public platform, we will strengthen cooperation withcustomers and various partners to promote environmental consideration throughout
the supply chain, working together to create green logistics.
As we do so, we will strive to create an atmosphere in which all employees keep intune with our corporate philosophy, respecting each other and contributing to a futurein which we “connect hearts and minds” to go beyond logistics and become thecompany of choice for our customers.
51

Copyright© 2023 SEINO HOLDINGS CO., LTD. All Rights Reserved.

Seino Tangible and Intangible Assets Linked to
the Resolution of Industry Issues

 Long-term, trust-based relationships with

 A Japanese leader in logistics

860,000 corporate customers

infrastructure (terminals, warehouses,
trucks) Outsourced logistics operations forleading global companies

 736 distribution centers throughout

Japan, and 26,000 vehicles
 Expanding logistics

 Instillment of philosophy andPhysicalassetsCustomer
assetscorporate culture No. 1 track record in BtoB trucking
 Diversified transportation network Extensive logistics data
 IT systems

 System of collaboration with

Organizational
assetsstartups
 Corporate sports that increase

sense of contribution

 A balance sheet that facilitates abalance between growth investment
and shareholder returns:
Equity ratio: 63.2%
Cash and deposits: More than ¥100.0bn

Financialassets Transportation group employees:

HumanassetsApprox. 27,000
Approx. 17,000 drivers
Approx. 500 dedicated salespeople Four new logistics-related

departments: Approx. 120 people Enhanced engagement and retention

52

Copyright© 2023 SEINO HOLDINGS CO., LTD. All Rights Reserved.

Sharing Goals and Achievements throughthe Employee Stock Ownership Plan
We provide employees with incentives to enhance corporate value over the medium to long term, while
promoting membership in the employee stock ownership plan as a means of enhancing employee
benefits.

Shares held
2,190,000

 We will strengthen the employee stock ownershipplan so that increased corporate value = economic
value for employees.
 Overview of employee stock ownership plan
Members: 5,289
Shares held: 2,190,000(16th largest shareholder) Incentive plan
FY03/22 to FY03/26 (four years)
At the end of the period, the amount of increase in the share priceduring the period will be distributed in proportion to the number ofshares accumulated by each member.

700,000

FY03/1653

FY03/23

 Employees can share in the goal and sense ofachievement as we work toward a PBR of morethan 1x.

Copyright© 2023 SEINO HOLDINGS CO., LTD. All Rights Reserved.

New Smart Logistics Initiatives
Example (1)Kamishihoro, Hokkaido (joint deliveries)
Japan's first land-air consolidated delivery by a drone delivery service provider of packages
for a major e-commerce company, involving relay deliveries by truck and drone of goods forjoint delivery from Obihiro

Drone

Truck
Urban areas

Relay delivery from ground transportation
driver to drone operator

54

Customer
Rural districts

Transport by drone

Delivery to customer
Copyright© 2023 SEINO HOLDINGS CO., LTD. All Rights Reserved.

New Smart Logistics Initiatives
Example (2)Linkage with JR Kyushu (Kagoshima ⇄ Fukuoka)
Verifying a logistic network combining trucks, drones, and passenger trains (conventional lines
and Shinkansen)
KyushuShinkansen

Destination

Hakata Station

Kagoshima Chuo
StationYamakawa Station

Yamagawaminato
Iokaido Roadside
StationIbusuki
Makurazaki
Line

Restaurant

10:00

11:00

Drone and truck transportationof Ibusuki seafood fromroadside station

12:18/12:42
Combined cargo and passenger
transportation from Yamakawa
Station to Hakata Station

Pickup and delivery by AirTruck

55

JR Kyushu “Haya!bin” service

14:30

Loaded onto the Ibusuki Makurazaki Line
stopped at Yamakawa Station

Seafood delivered torestaurant Kisuitei
Waraku in Hakata

Changed to Shinkansen at Kagoshima Chuo
StationSame-day delivery to shop in Hakata
StationCopyright© 2023 SEINO HOLDINGS CO., LTD. All Rights Reserved.

New Smart Logistics Initiatives
Example (3)Advanced example of First One Mile (Asahikawa, Hokkaido)
Local businesses in the Etanbetsu area collaborated on a Green Logistics project aimed at
reducing CO2 emissions by consolidating and packaging their own products and transportingthem to the city center in local business combining cargo and passengers
PJT
participants

Etanbetsu

CentralAsahikawa

Dohoku Bus

Respective
company existing
delivery networks

Company A

Company B

Individually packaged cargo anddeliveries are placed in regionaltransport cases and loaded onto buses

Cargo removed from regionaltransport cases and handed overto transportation service providers
or delivered to storesTransportation provided by PJT

Local businesses, rather than delivery companies, are taking the initiative to resolve regional,
industry, and environmental issues by “shipping" rather than “delivering”

56

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Declining Driver Numbers～Licensing System Revisions～ Due to driver's license revisions in 2017, young adults with standard driver's licenses cannot, inprinciple, drive two-ton trucks
 Further, four-ton trucks with high transport capacity require a mid-sized or larger special licenseStandard licenseacquisition date

Vehicle Gross Weight (Maximum loading capacity)
3.5t (2t)March 12, 2017
onward

7.5t (4.5t)

8t (5t)At acquisition: Standard
Currently:
Mid-sized (8t) limit

Up to June 1, 2007

June 2, 2007 to
March 11, 2017

5t (3t)At acquisition: Standard
Currently: Semi-mid-sized (5t) limit

Standard

Semi-mid-sized

18 years or older

18 years or older

11t (6.5t)
Large-sized

Mid-sized

Large-sized

Mid-sized

Large-sized

20 years or older
Note: Must hold standard driver’s license fortwo or more years

21 years or older
Note: Three or more
years

Young people face high hurdles in becoming drivers as they cannot operate trucks with apayload of two or more tons without a semi-mid- or large-sized truck driver's license
57

Copyright© 2023 SEINO HOLDINGS CO., LTD. All Rights Reserved.

Consequences for Failure to Comply with the
Improvement Standards Notice
In the event of an Improvement Standards Notice violation, the company will be subject to audits and guidance by the
Labour Standards Inspection Office and administrative punishment by the Ministry of Land, Infrastructure, Transport andTourism. If working hour restrictions are violated, a minimum 10-day vehicle suspension will be imposed.

Items

First violation

Subsequent violations

Five or fewer non-compliance items

Warning

10 day vehicle suspension

Six to 15 non-compliance items

10 day vehicle suspension

20 day vehicle suspension

16 or more non-compliance items

20 day vehicle suspension

40 day vehicle suspension

Violations separate and additional to the above
One non-compliance item in each issue

10 day vehicle suspension

20 day vehicle suspension

Two or more non-compliance items

20 day vehicle suspension

40 day vehicle suspension

Main sourcesof discovery

58



When a business site is identified based on supervision plans (periodic audits)When an incident is reported by an employee working onsite (reporting supervision)When industrial or vehicle accidents occur
Copyright© 2023 SEINO HOLDINGS CO., LTD. All Rights Reserved.

Inquiries regarding these materials
Corporate Planning Office, Seino Holdings Co., Ltd.
External: +81 584-82-5004
Internal: 851-2541/2542/2546
Email: shd-keieikikaku@seino.co.jp

59

Copyright© 2023 SEINO HOLDINGS CO., LTD. All Rights Reserved.