Japan FTC Warns Logistics Biz over Subcontract Law Breaches

Japan’s Fair Trade Commission (JFTC) has issued a public warning to Osaka-based logistics company Senko Co. for practices that allegedly violated Japan’s Subcontract Act, mainly by forcing subcontractors to perform loading, unloading, and lengthy waiting without pay.​

What the JFTC Found

The JFTC concluded that the core logistics unit of Senko Group Holdings requested “unreasonable economic benefits” from 36 subcontractors by having them load and unload freight and wait on-site without compensation. In some instances, subcontractor workers were reportedly kept waiting for more than two hours during loading and unloading operations without any payment for that time.​

Legal Basis under Subcontract Act

These practices were treated as violations of Japan’s Subcontract Act (formally, the Act Against Delay in Payment of Subcontract Proceeds, etc. to Subcontractors), which prohibits large contracting firms from imposing unfair burdens or extracting unjust benefits from subcontractors. The law is designed to ensure timely and fair payment and to prevent large companies from abusing their stronger bargaining position in dealings with smaller subcontracting firms.​

Measures Ordered by JFTC

The JFTC ordered Senko to compensate the affected subcontractors in amounts equivalent to what they should have received for the unpaid loading, unloading, and waiting work. The commission also urged Senko to put in place compliance and prevention measures, making this the first publicly disclosed JFTC warning specifically focused on unpaid loading/unloading and waiting time in the logistics sector.​

Broader Logistics and Policy Context

The case comes amid wider concerns about capacity strains in Japan’s logistics industry linked to truck driver shortages following stricter overtime limits introduced in 2024, sometimes called the “2024 issue.” In response to structural problems in subcontracting and payment practices, Japan is transitioning from the current Subcontract Act framework toward a new Fair Transactions Act taking effect in 2026, which will broaden coverage of logistics and transport consignments and involve closer cooperation between the JFTC and other ministries.​