"Made in Japan" is a phrase attached to products and goods that has become, in many instances, a synonym for a high-quality product. However, the high domestic and international acclaim and recognition garnered by Japan's manufacturing industry was only made possible by a smooth flow of materials and goods. Japan's logistics industry has always played a crucial role in the country's economy, growing in tandem with its productive capacities. It catered to the growing demand for transportation and storage of goods, linking industries and consumers with materials and products. Shipping companies like Ocean Network Express (ONE), Nippon Express, and Yamato belong to the largest companies in the logistics industry worldwide, operating domestically and internationally alike.
Trucks and maritime vessels dominate domestic freight transportation
In 2022, the
domestic freight volume handled in Japan amounted to roughly 4.19 billion tons. Most of this volume was transported by trucks and coastwise shipping, which are the
dominant modes of transport in Japan's logistics industry. While gravel, food, and mixed loads are some of the principal freights carried by trucks, coastwise shipping cargo is mainly constituted of industrial goods, fuels, and construction materials. Trucks are the most convenient terminal transport mode, using Japan's well-developed road system. On the other hand, ships are used for larger distances for durable bulk commodities, and account for a large share of the
total payload distance of cargo in Japan. Despite having a highly developed railway system, most railroad activity is focused on passenger transportation, making freight transportation via rail an auxiliary segment. Air cargo transport is the smallest industry segment and is used for freight that is under time constraints and needs to arrive as quickly as possible at its destination.
Cutting costs while addressing labor shortage
Fierce competition is a defining characteristic of the logistics industry in Japan. This is especially the case in the particularly fragmented trucking segment, that mostly features small and middle-sized companies. Logistics providers have started optimizing their business by outsourcing specific parts of their services to third-party service providers (3PL). As further solutions to cut costs and mitigate labor shortage, companies invest in automation and artificial intelligence. The
logistic system market in Japan nearly doubled its value during the past decade. The market can be expected to further grow, as companies will attempt to explore technological solutions to the challenges they face. For instance, automated warehouses are already being employed and belong to the
most sought-after technologies in Japan's logistics industry. Other technologies, such as fully autonomous driving systems for trucks, still need time until they can be deployed.
The logistics industry must keep on rolling
For Japan, developments in automation cannot come soon enough. Its logistics industry, and especially the all-important trucking segment, is suffering from chronic labor shortages that are getting worse due to unattractive working conditions. Whether the introduction of modern technologies, paired with government efforts such as the "white logistics movement" will be enough to address the challenges faced by the industry in a timely manner, is uncertain. Either way, the logistics industry must keep on rolling, even if it means that the transportation of goods will become more expensive in the future.
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