Logistics News Navi [July 13, 2026 Issue] First Recommendation under the Act on Promotion of Fair Subcontract Transactions: Law Takes Action Against 'Unpaid Work' in Cargo Handling

Hello everyone.

Today in Tokyo, it is cloudy with a forecast high of 30°C. With a 50% chance of rain, it looks like it will be a humid day before the rainy season ends.

Today, I will cover the recommendation issued by the Japan Fair Trade Commission (JFTC) last Friday, July 10. This is quite important news for those involved in logistics and supply chain operations.

■ Topic
Recommendation under the Act on Promotion of Fair Subcontract Transactions issued to Minebea AccessSolutions
First application regarding 'Specified Consignment of Transportation'
(Source: JFTC Press Release, July 10, 2026)

What is the content of the recommendation...
On July 10, the JFTC determined that Minebea AccessSolutions (based in Miyazaki City, a company engaged in the manufacturing and sale of automotive and motorcycle parts, etc.) had violated the Act on Promotion of Fair Subcontract Transactions (Subcontract Act) and issued a recommendation requesting the prevention of recurrence.

There are two facts of violation in this case.

First, it concerns manufacturing consignment. From at least January 2024 to February 1, 2026, the company continued to have 36 subcontractors, to whom it had outsourced the manufacturing of automotive and motorcycle parts, store a total of 846 items, including molds, without bearing any of the storage costs. The Subcontract Act prior to its amendment was applied to this.

The second point is the core of this case. From January to April 2026, the company had one small-to-medium-sized business, to which it had outsourced the transportation of parts, perform cargo handling work such as loading and unloading, as well as incidental tasks, for a total of 546 hours without compensation. The Act on Promotion of Fair Subcontract Transactions, which came into effect in January of this year, was applied here. The JFTC determined this to be a violation of the 'prohibition of requesting the provision of unjust economic benefits' (Article 5, Paragraph 2, Item 2 of the Act) in 'Specified Consignment of Transportation.' This is the first case in the country to receive a recommendation based on the 'Specified Consignment of Transportation' provisions of the Act.

Note that the full amount of the disadvantageous costs has already been paid. Even so, the JFTC issued the recommendation, stating that 'measures are necessary to ensure that the violation is effectively eliminated,' and requested that the company confirm the prevention of recurrence through a resolution of its Board of Directors.

What is 'Specified Consignment of Transportation'?
The Act on Promotion of Fair Subcontract Transactions was enacted in January of this year following the amendment and renaming of the former Subcontract Act. A new category added to the scope of regulation by this amendment is 'Specified Consignment of Transportation.' This refers to transactions where shippers, such as manufacturers, outsource the transportation of their products to logistics operators.

Under the previous Subcontract Act, four types of transactions were subject to regulation: manufacturing, repair, creation of information-based products, and provision of services. Although transactions where shippers outsource transportation were treated as part of service provision, the scope of application was ambiguous, and the forced unpaid performance of cargo handling and incidental tasks had been accepted as a 'business practice' for many years. The Act on Promotion of Fair Subcontract Transactions explicitly brought this area under regulation and clarified the obligations of shippers.

Demanding not only the publication of the company name but also a Board of Directors resolution
What is noteworthy about this recommendation is that it goes beyond just publishing the company name and requires confirmation of recurrence prevention through a resolution of the Board of Directors.

A recommendation is the most severe administrative measure under the Act. The fact that the JFTC chose this measure in this instance means that it judged such a response to be necessary. Furthermore, by requesting that the prevention of recurrence be 'confirmed by a resolution of the Board of Directors,' it explicitly demands that the organization address the issue with the involvement of top management.

The disadvantageous costs had already been paid in full. Even so, a recommendation was issued, the company name was published, and a response at the management level was required. From the JFTC's stance this time, one can read the intention that they do not intend to let this first recommendation regarding Specified Consignment of Transportation end as just the processing of a single case.

'Business as usual' will no longer work
The Act on Promotion of Fair Subcontract Transactions was enacted in January of this year. The period of violation in this case falls exactly within those four months immediately following its enactment, from January to April.

Even though the rules have changed, long-standing business practices do not change so easily. How many shippers in the industry were complacent, thinking that? This recommendation is the result of the JFTC confronting that complacency head-on.

The practice of having logistics operators perform cargo handling and incidental tasks without compensation is not limited to specific industries or regions; it has been deeply rooted in the manufacturing sector. This structure has been maintained for many years through a combination of the shippers' perception that 'this was the norm' and the logistics operators' position that 'if we refuse, we will lose the work.' The enactment of the Act on Promotion of Fair Subcontract Transactions has drawn a legal line under that 'norm'.

What this case has shown the entire industry is simple. If you fail to change your business practices after the law is enacted, your company name will be published, and you will be required to respond at the management level. It is not a matter of 'paying and it's over' or 'the measure is the end of it.' I believe the question is whether logistics and legal personnel at shipper companies can simply brush off this case as 'someone else's problem'.

That is all for today. Look forward to the next issue.