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'2024 bug' to wreak havoc on Japan's logistics

14 Comments

"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

©2022 GPlusMedia Inc.

14 Comments
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I've had my last five deliveries left for me to find even though I was home because they didn't have time to ring the doorbell to let me know my package had arrived. Two of them didn't even put it in my delivery box and a third one didn't manage to lock it. 2/5 is really terrible for box delivery and 0/5 is inexcusable for not ringing a bell... but they're overworked and underpaid because capitalism is exploitative.

0 ( +0 / -0 )

I always find that delivery drivers simply leaving the package in front of the door is hit or miss even when it’s requested. Some simply don’t notice the detail or are not used to doing so since it’s a relatively newer service in japan

1 ( +1 / -0 )

Lots of delivery is a watse of time,if you send a parcel next door,the parcel will be picked up ,put in a plane and flown to bFedEx main distributor,unloaded,process put on a plane and delivered next door

No. I was a front line dock manager at one of the biggest FedEx Ground terminals. A package picked up locally by one of our trucks with a delivery zip code that is the terminal's service area is sorted and sent to a trailer for local packages during the "outbound sort" (packages picked up that are going out of the terminal area). When all the other outbound trailers are loaded that local trailer stays at the terminal. It will be unloaded later when all the freight from other parts of the US and the world are unloaded, sorted and put on trucks for local delivery the next day (the "inbound sort"). FedEx has a very efficient operation. But I admit I really didn't understand time deadline pressure or "going postal" until working in that pressure cooker. Senior managers poke you in the chest with a forefinger and let loose a string of f-bombs at you when things are not going well. I had to tell HR there that if this one sort manager ever poked me again I wasn't going to call HR, I would call the police. I've seen some managers fist fight too because one was seen as holding the other one up and the one being held up lost patience and started throwing blows.

3 ( +3 / -0 )

It's a funny thing but for all the complaining about here about Japan I can't say enough good things about the merchants I order from in Japan or Japan Post. I can order something from Rakuten, Yahoo! Japan Auctions or Mercari using the Buyee proxy buying service, have it shipped to the Buyee warehouse most often by Yamato Transport and they forward it to the US using Japan Post EMS or sometimes FedEx Express. The package arrives in the US faster than FedEx Ground, UPS or the US Postal Service could ship same package to me from the opposite coast within the US. And the cost is close to the same for the same size and weight package. Items from Japan are always packaged more carefully than goods from the US. I sometimes order items from Europe and they take weeks to arrive. Our family in Shanghai sends packages that take several months to arrive here, and ours take months to arrive there. Japan post gets it from Osaka to my door in three to four days normally. Yamato Transport seems to be able to get goods from just about anywhere in Japan to Osaka in two to three days. I am very pleased with my dealings with Japanese merchants.

2 ( +2 / -0 )

The economical solution is to follow the example in America. Deliveries are made to the door whether the occupant is home or not.

5 ( +5 / -0 )

Lots of delivery is a watse of time,if you send a parcel next door,the parcel will be picked up ,put in a plane and flown to bFedEx main distributor,unloaded,process put on a plane and delivered next door

0 ( +0 / -0 )

Improve the working conditions and increase the pay will resolve the looming labour pinch. Japan has inculcated unrealistic customer expectations which clearly in current circumstances are becoming uneconomic, so firms will have to manage customer expectations and introduce realistic charges for additional services. Introduced industry wide will ultimately benefit customers as the service will remain not disappear as firms go bust and will maintain profitability as well as improving the lot of the delivery staff.

1 ( +1 / -0 )

It just only depends on the contracts case by case. If a customer , doesn’t matter how far away residing, orders something, he has to pick it up timely and at the factory gates in theory. Of course in the very most cases a delivery option is offered, but as the producers mostly don’t have own delivery logistics they outsource that part to logistics companies. That means, not only the producer has to contracts, with you as customer and with the delivery company, but often you have two separate contracts too, with the producer and the delivery company. So there’s no fixed ruling. Both contract partners (of the three involved) can determine their business-to-customer and business-to-business contracts freely and design the contract paragraphs at their free will, for example in cases of lacking drivers or too high gasoline costs.

2 ( +2 / -0 )

@Dessert,

2 years at Yellow Freight and a year at UPS as a loader/driver.

Been there myself at 3 AM in the top of a trailer in July and 3 AM at the last door before the conveyor belt went out the door to the Temp staff loading in the open air (never been so thankful for seniority in all my life) in February, both in KS.

It's rough work to be sure and one of the reasons I studied so damn hard in Grad School. But the idea that it's not evolving and that, especially at the distribution center level, technology is not revolutionizing logistics is in my considered view, inaccurate.

I think that delivery and logistics companies will overcome this hurdle for no other reason than they have to in order to remain a going concern.

10 ( +10 / -0 )

@Desert Tortoise

Thanks for that 1st hand insight into what appears to be a "nightmarish" industry hanging on the edge.

The only realistic short term solutions I can see are -

1) People have to accept longer waiting times ( if you can wait hours in all weather for a bowl of udon, then a little longer in the comfort of your home is no big deal)

2) People have to be willing to pay more for the privilege of "ping-pong" front door delivery. I mean how convenient is that and in many cases purchases come with free delivery. And for 2nd try deliveries - well be prepared to pay extra, esp if no time is nominated. And I don't mean ¥10 - how about ¥100s.

3) Do the above and increase the pay and work conditions for drivers.

But as the article and Desert T indicated - the biggest snarls are the commercial deliveries, a real hard basket to reform I imagine. I guess part of the answers there are also longer waits and paying more.

6 ( +7 / -1 )

@Nemo, I worked in the transportation industry for way too long, decades. It's an ugly business. When it comes to freight delivery to retail customers, most of your customers do not have a loading dock. You have to manhandle the freight with a pallet jack or a dolly. If you are really really lucky your customer has a fork lift and can take the freight from the tail of the trailer, but you still have to use a pallet jack to move the pallets back to the tail of the trailer so the forklift can take them. When the pallets weigh 600 kg and are boxes of frozen sea food and the trailer is refrigerated (meaning icy slippery deck) and you are parked at the curb on a highly crowned street getting those pallets to the tail of the trailer for the forklift is backbreaking work. I've busted every imaginable load off the back of a trailer that way.

Delivering fuel is another job that can't be automated. Six loads a night to different gas stations dragging four hoses out at every delivery, lifting the hoses to get the fuel out before capping them and returning them to their hose tubes or hose trays, you end your night with sweat stained clothes and sore shoulders. And some of these gas stations like Costco or some big car wash gas stations sell five loads per day, more than the biggest underground tanks can hold. It's one load after another or they run dry (other stations sell less and need a load every other day sometimes, just depends on the gas station).

Think about all the little shops you see every day. How many have a dock where a truck can back up? Not many. That means manhandling the freight. You can add people to the mix to maybe ease the individual workload but that costs money and the other guy always figures they can just pile more work on the drivers they have and undercut their competition. The only way to prevent drivers from being grotesquely overworked is by laws like Japan is imposing.

11 ( +11 / -0 )

Yes, using existing methods and tech this will be a logistics disaster. One suspects that the authors of this "piece" (I cannot think for a more diplomatic term without more coffee.) have never heard of little things like "technology" or "process reform."

One would be forgiven for thinking that the mangers for for-profit enterprises are so immune to events and circumstances as to insist on the use of buggy whips and wheel-less sleds in the conveying of goods from point A to point B.

I know that managmement usually gets a bad rap - sometimes deserved - for not seeing what is coming and evoling to meet it, but that is not universally the case. Japan's logistics distribution network has historically been labor-intensive owing to its geographic "challenges", abundance of cheap labor and traditional customer service expectations. However, all of this is changing (except the geography of course.)

Newer, less labor-intensive delivery routes and methods that will reduce fuel costs, the necessity (or availability) of on-demand re-delivery, etc. will make up for the reduction in the pool of available labor as will smart phone apps already in wide-spread use.

And if industry fails to meet the challenge, the "invisible hand" of the market will guide labor to the industry and customers away from inefficency in the form of higher prices for labor and delivery service. Problem solved, at least from an economic sense.

I guess if it were not all gloom and doom, Kuchikomi would have no readers.

-1 ( +2 / -3 )

It seems that over working and under paying truck drivers is a global problem. In the US trucking firms expect you to work right up to the 14 hour legal limit every day.

8 ( +8 / -0 )

If that weren't enough, the demands on drivers to return for second (or third) deliveries has added to their burden

Simple solution. Just abolish same-day redelivery. You're not home, and don't have a lock box? You wait until the next day. Or, if the vendor offers it, select "unattended delivery", so they leave it by your door.

5 ( +9 / -4 )

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