"Up to now, distribution has managed to overcome several crises, but this time, there's real concern that the industry might not be able to move goods."
That is how Hiroaki Oshima, who heads the specialty think tank NX Logistics Research Institute and Consulting Inc puts it.
The headline in Weekly Playboy (Sept 5) puts it like this: "The collapse in distribution has already begun!"
The tipping point will come in April 2024, the logistics equivalent of the Millennium Bug. That will be when the 2019 law designed to protect truck drivers from overwork takes full effect.
Specifically, the law limits truck drivers to a total of 960 hours of overtime during one calendar year. The 960-hour figure may seem like a lot, but actually it represents a major reduction in hours from the status quo.
The coronavirus pandemic, now in its third year, has had a huge impact on demand for home deliveries, with the number of deliveries made in 2020 (4,836,470,000) having increased over 2019 by more than 500 million -- an 11% rise.
If that weren't enough, the demands on drivers to return for second (or third) deliveries has added to their burden.
"When nobody's home to receive the goods, it doesn't just mean extra work for the drivers, but also consumes that much more fuel," gripes a Kansai-based self-employed driver in his 20s. "It's no sweat off customers' backs if we miss the first delivery attempts, but in terms of revenue, sometimes we might not break even."
Government statistics show that around the early months of the pandemic, when people were requested to curtail activities, first-time missed deliveries fell to around 8%, but it they have since bounced back to 11.7%. In April of this year alone, that means some 310,000 first-attempt deliveries failed.
With losses mounting up, delivery firms are at the point of demanding a surcharge for redeliveries.
"There are days when I handle over 200 deliveries," said the aforementioned driver in Kansai. "Individual drivers are often thought to have a lot of discretion in their operations, but there is no room for that in a time-sensitive workplace."
Safety is another concern. While the overall trend has been for traffic accidents to decline, such has not been the case for mishaps involving light commercial vehicles, which have increased rapidly. Over the past five years, accidents classified as "serious" among this category of vehicles grew by around 80%.
Be that it may, deliveries to consumer households and individuals account for only 2% of all items transported. The remaining 98% involves business-to-business transactions, such as goods moved between distribution centers and retail outlets. The drivers' wages in this field are said to be 20% lower than in other industries; if converted to an hourly basis in some cases they might be the equivalent of 500 yen per hour. When the 2024 law finally kicks in and depresses their wages, some drivers might just call it quits and seek employment elsewhere, further aggravating the pinch.
In an effort to eliminate the need for redeliveries, a Tokyo company, Yper, is been offering trucking firms a solution. Called Okippa, it's a tough, water-repellent bag for protecting delivery items, designed to be placed outside customers' doors, and secured, if desired, with a metal loop that is opened by combination lock.
According to Yper's president Tomoharu Uchiyama, 88.9% of the surveyed drivers said they had hopes this device would contribute to reducing redeliveries.
Yper is also in the process of developing drones and robots to facilitate unmanned deliveries.
While expected to catch on quickly in urban and suburban areas, such will probably not be the case in the countryside, where small-scale operators lack capital and technical knowhow to digitalize their operations. Rural Japan is widely known for its "allergy" to adoption of IT.
Even now, the logistics industry is already feeling the pinch, and with the April 2024 deadline looming, time is running out. The key to dealing with the impending crisis will be to proactively adopt new labor-saving and time-saving technologies.© Japan Today