Governmental Logistics Initiatives in Japan

In a recent issue of the New Japan Distribution News, a print newspaper in Japanese, there was a front-page article on the policy of the Japan Business Federation (日本経団連) in regards to improving the national efficienty of Japanese logistics.

I have written before on trends in Japanese logistics and also mentioned this report on Northeast Asia logistics. The policies summarized below should be considered in the context of that information; especially in regards to one of the issues I have mentioned before: that Japan has a problem with legacy infrastructure--in relation to roads, sea ports, air ports, and rail--built up during its boom days but that lacked a national strategy. Now with increasing competitive pressures due to globalization, Japan is finding it difficult to build a national logistics network strategy on top of this legacy infrastructure. In fact, without renewal in infrastructure, the logistics efficiencies the Japanese government is trying to draw out of the industry will not come to fruition with the appropriate timing or manner necessary to increase the business throughput desired.

So that is the focus of this policy--infrastructure renewal that aims to eliminate bottlenecks towards establishing the ideal logistics network nationwide. Below I go into the infrastructure areas and summarize the articles main points for each.

1. Roads: The idea is to reduce traffic congestion while smooting out the flows of people and product between East and West Japan. In East Japan especially, the goal is to accelerate as much as possible improvement in the road linkages between central Tokyo and the outer highways. Another important effort will be made to improve road access into airports and sea ports envisioned in creating inland logistics hubs. These roads especially would focus on creating logistics arteries specifically to improve the flow of set-route trucking that would link with containerized sea freight, eliminate bottlenecks and enhance "modal shift" opportunities.
2. Sea Ports: For the efficiency and advancement of port functionality, the goal is improve terminal functionality that would create seamless and speedy logistics links with Asian neighbors. In particular, this would take advantage of the economic tie-ups growing with ports along the Sea of Japan, building more comprehensive port facilities.
3. Air Ports: Not as much was written here except to say that improvements in equipment that can be realized should be accelerated as quickly as possible.
4. Rail: To improve transportability, the goal is to shorten total shipping time. In addition to improving railway capabilities, another important goal is to improve the ability of rail stations to better service the loading and unloading of goods, enhancing modal shift opportunities. It will be necessary to investigating the fitting of logistics hubs with smooth rail linkages.
5. Logistics Infrastructure Renewal: As I stated before, the article reiterates the fact that much of the modal logistics infrastructure mentioned above was built in the 50's and 60's during the post-war boom period. As a result, comprehensive improvement and renewal will increase. But in order to do this, a significant amount of funds will have to be procured.

I have seen a lot written by the government on improving nationwide logistics--the real question is whether these ideas can be executed. In my opinion, a number of cultural and bureaucratic hurdles will need to be overcome to do so and, although cliche, only time will tell if this is possible at the pace the government would like to see.

Comments

[Chris Corkery]

Though there are very obvious differences in Japan, lessons can likely be drawn from the current far reaching EU initiatives attempting to do similar things. In Europe there are coordinated and wide ranging initiatives attempting to improve rail usage, lessen bottlenecks on the roads, increase barge usage, curb environmental side-effects of logistics, develop better port infrastructure, etc. All can be found in a white paper entitled "European Transport Policy for 2010: Time to Decide" and related programs like "Marco Polo," "Magellan," etc. The upshot might lead one to conclude that Japan is doomed to meet with less than total success. Be that as it may, any watered down progress would seem to be a dramatic improvement over the lack of progressive movement we are seeing with the US infrastructure malaise.