Ten days have passed since the start of the period of the “2024 problem,” in which the estimate has been made that “there will be a 14% shortfall in transportation capacity in the FY2024 if no measure is taken.” Measures including cooperative delivery, establishment of relay transportation, and prevention of redelivery of parcels, have been taken by logistics companies and consignors one after another. Six confectionery manufacturers in Niigata, including Bourbon Corporation and Kameda Seika Co., Ltd., will start “cooperative distribution in production areas,” FamilyMart Co., Ltd. and Lawson, Inc. will jointly deliver products in the Tohoku region, and Hokuetsu Corporation will shift its transport system for waste paper from using trucks to railroads. Parcel delivery companies announced the introduction of a “contactless package drop” system in full swing, and airline companies are also working on strengthening their freight transport services.

On April 8, a Japanese-version ride-sharing service was launched, where ordinary drivers transport passengers for a fee. The areas covered are limited to the specific regions in Tokyo, Kanagawa, Aichi, and Kyoto, and the number of cars operated and operating hours are specified for each region. In addition, the Japanese-version ride-sharing service is different from those deployed in overseas countries as a platform business in that taxi companies are responsible for operation management. This is why this service is called a “Japanese version.” There has been strong opposition to the relaxation of regulations from existing industries, and at this point, it is hard to say that this will be the clincher for combatting driver shortages. However, this is progress in the sense that a demonstration experiment has been started to solve the problem.

On the other hand, local bus operators who are required to address the shrinking demand itself have limited strategic options. Kongou Jidousha Co., Ltd., which had been operating local buses in Tondabayashi City, Osaka, discontinued all routes at the end of last year due to the unprofitable conditions and driver shortages. In addition, Nishitetsu Bus, operated by Nishi-Nippon Railroad Co., Ltd. in the Kyushu region, reduced the services on 30% of all routes. Kokusai Kogyo Bus, operated by Kokusai Kogyo Co., Ltd. in Tokyo and Saitama, also had to reduce the services on the routes and set earlier departure times for the last buses. The vicious cycle of driver shortages, decreasing convenience, and further declining demand is concerned.

The reason why the regulatory limit on overtime work has become such a serious “problem” is originally that society as a whole has been supported by the transportation industry where low wages and overwork were a common practice. According to the “White Paper on Traffic Policy 2023” released by the Ministry of Land, Infrastructure, Transport and Tourism (MLIT) in 2022, the average monthly working hours of truck drivers per person are 212 hours, while the average in all industries is 177 hours. Likewise, the average annual income of bus drivers per person is 3.99 million yen, while the average in all industries is 4.97 million yen. The government encourages appropriate cost pass-through, review of business practices, productivity improvement through digital transformation, behavior changes of consignors and consumers, and structural reforms. Changes in competitive conditions could be new business opportunities and a starting point for business stimulation. The problem lies in public transportation and rural areas where this effectiveness does not reach, and it is urgently necessary to reconsider the situation from this perspective to prevent “uncovered area” that do not belong to the network under the new regulations.

This Week’s Focus, April 12

Takashi Mizukoshi, the President