The right mode of transport: a matter of timingTrucking and coastal shipping are the Japanese logistics industry’s preferred modes of transport, in terms of yearly payload-distance. Railway and air transport are also used for transporting goods, however, despite the railway network being highly efficient for the transport of people, most logistics facilities, warehouses, and factories are better connected to roads. Railway cargo transport, dominated by the Japan Railway Freight Company (JR Freight), has experienced a certain decline recently. Despite shipping's significance given Japan’s vast coastline and the fact that vessels are usually more economical in terms of loading capacity and energy consumption, the shipping volume decreased as well.
In some cases, however, goods and materials need to arrive quickly. In such cases the cost of a flight might be warranted, some seafood caught in the morning off Hokkaido’s coast can regularly find itself on a dinner plate in a first class restaurant in Tokyo by night.
High-tech and white logistics: mitigating logistics costsFreight trucks, trucking terminals, and warehouses remain indispensable for the logistics industry as well as the manufacturing, wholesale, retail, and courier and parcel service industries, however, fierce competition is putting cost pressure on the logistics processes. Businesses, naturally aiming to minimize costs, will usually opt for the most cost effective option. To keep up with the market, logistics have had to develop into a highly complex craft where precise coordination and economies of scale are necessary to cut costs. Moreover, service providers might further optimize their business by outsourcing some work to a third party, which is called ‘third-party logistics’ or ‘3PL’.
Technological advance is another way for further reducing costs: Automation and artificial intelligence are likely to expand within the logistics system market. Automated warehouses are already in operation and although the concepts for fully autonomous trucks may one day be a possibility, it is not yet available. For Japan, developments in automation cannot come soon enough. The Japanese logistics industry suffers labor shortages, and today's drivers are rapidly aging, thereby threatening to increase the fraction of transport costs in the sale of goods.
One of the government's responses to this problem was the foundation of the 'white logistics movement'. This initiative has two aims: Firstly, improving the trucking industry's productivity. Secondly, creating working conditions that encourage women and the elderly to work as truck drivers. Whether this strategy is sufficient to uphold international competitiveness until automation is furtherer developed remains to be seen.