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No swift recovery of the Japanese market in sight

Nils Meier is Hapag-Lloyd´s Managing Director in Japan. He is currently on the front line of the battle against the economic impacts of the pandemic. In this interview, he talks about the current challenges in the country.

How are things going in Japan right now in terms of COVID-19?

The mood has become a bit more tense again in recent days because the number of new infections is slightly rising. But there’s no cause for panic. In Tokyo, whose 38 million residents make it the biggest mega-city in the world, there are currently about 200 to 300 new cases of COVID-19 per day. But you have to take these case numbers with a grain of salt because Japan is conducting relatively few tests for COVID-19. The government is nervous and is once again discussing whether it should impose travel restrictions within the country. However, on the whole, the situation is stable.

How has the economic situation in Japan been developing?

Japan has been hard hit by the pandemic. The country’s economy is dependent on a very robust automotive sector. We are acutely feeling the reliance on this industry now. In May, Japan’s automakers saw production decline by 60 percent compared to the prior-year figure. May and June were the worst months for the Japanese economy. Production is slightly increasing right now because a lot of factories have resumed production, but economic output is still well below last year’s level. In the first half year, Japanese exports shrank by 14.5 percent. Things are only supposed to get better in the fourth quarter.

How has the pandemic influenced Hapag-Lloyd’s business?

We’ve been very strongly impacted, too but we are faring a tiny bit better than the market. We also only have very limited leeway to position ourselves differently in this crisis, as the ailing automotive industry is by far the largest sector. But we are doing everything we can to advance our commodity-diversification efforts and to expand the chemical and retail sectors, in particular.

Have all your employees returned to the offices?

A state of emergency was in force in Japan in April and May. During this period, we had closed our three offices – in Tokyo, Osaka and Nagoya. The entire staff worked from home except for two employees who took care of the most critical administrative tasks in the offices. About 30 percent of the staff is back in the offices now, and the rest are working from home. For the time being, we will wait to see how the infection figures develop and then decide on the further procedures.

What are the most important Japanese export goods besides those from the automotive sector?

In addition to cars, car parts and tires, one of the most important export goods is machinery, such as agricultural machinery and chemicals. And of course there are lots of reefers, which are particularly important when it comes to imports. The food & beverages sector is extremely strong in the import segment. In the case of reefers, we have a big imbalance between imports and exports. Last year, Hapag-Lloyd imported much more reefers to Japan as exported. A significant portion of export reefers are loaded with batteries for electric vehicles. I find that exciting because hardly anyone would think that reefers are used to transport batteries.

In Europe, we often read about Japan’s ageing society. Is that something one notices in everyday life?

The proportion of very old people in the society is definitely large. But instead of living in seclusion and solitude, most pensioners continue to be very active. Many of them look for a new job in retirement or do voluntary work. Right now, older people are naturally leaving their houses a lot less often because they belong to a high-risk group.

Japan is viewed as having a unique working world and work ethic. Why is that?

One big problem is that many Japanese people put far too much effort into their job – to the point that it can even be harmful to their health. In fact, there is even a term in Japanese for a sudden death resulting from overwork: karōshi. We take this problem very seriously. That’s why we have a doctor visit us once a month in the Hapag-Lloyd office to make sure that all our employees are doing well. We also pay close attention to ensuring that colleagues take enough vacation. During the lockdown, we have tried to reduce overtime hours. Having employees work from home is a good way to reduce stress a bit, as the commute to and from the office in completely crowded trains and buses is no longer necessary. Surveys show that employees really enjoy working from home, as it gives them a bit more flexibility to balance family and career.

 

About Nils Meier

Nils Meier started his career at Hapag-Lloyd after finishing his studies in Siegen, a university city east of Cologne. After working for two years in Controlling in Hamburg, he moved to Hong Kong, where he switched from Controlling to Sales. Shortly thereafter, he became Sales Director in Shanghai. After serving as Country Manager Vietnam and Managing Director Indochina, he was appointed Managing Director of Hapag-Lloyd Japan.

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