News Japan's 2024 problem: not enough truck drivers

Japan faces a severe shortage of truck drivers, an issue so dire it's been coined the "2024 problem". New overtime regulations imposed next year contribute to the shortage. PM Kishida announced new measures to tackle the situation to be included in the government's new economic stimulus package.

They told the prime minister that the increasing number of working couples has led to fewer people being at home and more redeliveries. They said this is putting a huge burden on them.Kishida said that measures to address the problem would be included in the government's new stimulus measures to be compiled by the end of October. He told them he will convene a meeting of related ministers next week to draw up an emergency package to help realize logistics innovation. He said that includes automation of parcel loading and unloading, and reducing redeliveries.

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The government also aims to double the volume of cargo shipments by rail and sea over the next decade to encourage wider use of ferries to transport cargo and roll-on/roll-off vessels that can carry truck trailers. These RORO vessels give drivers time to rest while cruising on water.

The measures also will call for using container ships that can transfer containers between trucks, saving time on the road. Tokyo is considering providing support to companies that use these ships. Japan's new overtime rules for truck drivers take effect in April, limiting them to 960 hours of overtime in a year. The pool of available drivers is expected to shrink, a phenomenon called the "2024 problem" in Japan. The bottleneck is estimated to lead to a 35% shortfall in hauling capacity by trucks in terms of cargo volume in 2030. To cover this hole, Japan targets having ships transport 100 million tonnes of cargo yearly over the next 10 years, up from 50 million tonnes in fiscal 2020. Rail shipments will be set for 36 million tonnes, from 18 million tonnes in fiscal 2020.

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Paywall alert:

Speaking of which, where's Mr. Cash been lately, anyway? I'd love to hear his insight on this topic.

Can't think of better bait.

Sounds like Japan needs a bunch of Mike Cash clones. I wonder if he's retired. Or still hitting the Japan byways.

No idea. I see he even stopped his twitter in 2018. He had a life so different than your typical American living there he had a lot to teach.

I would not want to make him angry on the road while ahead of him , LOL.

Japan's trucking industry is facing a double challenge: a shortage of drivers and a new law that will cap their overtime hours from 2024. The sector is essential for Japan's economy, transporting goods and materials. However, it is having trouble finding enough drivers to meet the demand. The average age of truck drivers in Japan is 54, according to the Japan Trucking Association. Many work long hours for low wages, often sleeping in their trucks. They also suffer from health and safety issues, such as fatigue, accidents, and chronic diseases.

Moreover, they have to deal with social prejudice and isolation, as they are seen as low-status and dirty workers. The industry is trying to attract new drivers and improve efficiency by offering higher pay, training, and subsidies. It also adopts new technologies like digital platforms, GPS systems, and autonomous and electric trucks. These innovations could help reduce costs, emissions, and accidents and increase productivity and convenience. The trucking industry is not only crucial for Japan's economy but also for its society. It plays a vital role in the supply chain, especially after the COVID-19 pandemic and the natural disasters that have hit the country. It can also contribute to social change, such as promoting gender equality, environmental sustainability, and regional revitalization. The trucking industry is vital to Japan's future, but it must overcome its current challenges and seize opportunities.


Here's an insight into the future of Japan's road transportation sector by Nikkei:

Paywall alert:


And while stricter rules mean more time to spend with the family, it also boils down to less disposable income:

At Fujikura Transport, Kajiyama, the driver, can only guess at the impact on the trucking industry as a whole, although he's fully aware of how the changes will affect him personally. While he is happy that he can now help cook dinner for his wife and indulge in his beloved hobby of fishing on weekends, it comes at a cost. "Even if I work one less hour [per day], in 20 days, that would be 20 hours less pay, right?"

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The NYT had an insightful feature on Japan's trucking crisis:

Japan's trucking industry is a crucial cog in one of the world's largest economies, and it is the lifeblood of the Japanese culture of ultra-convenience. But it and its drivers are under immense strain. To improve job conditions and make the work more appealing, the government is moving to cap overtime for the first time next year, easing the punishing hours that have long-defined trucking in Japan. Addressing that problem, however, will create others — potentially disrupting the nation's entire logistics system. It is unlikely that enough drivers of big rigs and delivery trucks can be hired anytime soon to make up for the lost overtime hours. The shortfall could leave supermarket shelves bare of some items and threaten the speedy door-to-door shipping — luggage to the airport or golf clubs to and from the resort — to which Japanese people are accustomed. Officials are calling it the "2024 problem."

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More than 90 per cent of cargo in Japan travels by road, compared with about 73 per cent in the United States. With the lost overtime hours, analysts estimate a 14 per cent deficit in delivery capacity next year. Some drivers work 100 overtime hours or more each month because the work demands it or they need the extra pay.

But starting in April, overtime will be capped at a monthly average of 80 hours or a daily limit of 15 work hours. According to government estimates, a third of Japan's cargo could be undelivered by the decade's end, resulting in a USD 70 billion economic hit in 2030 alone.




One solution is to mobilise the female workforce, a trend becoming quite visible on Japan's roads—the Guardian on the growing female cohort of truck drivers:

When Mayumi Watanabe tells people what she does for a living, most struggle to hide their surprise, and not just because of her diminutive stature. As a truck driver with 23 years behind the wheel, she is one of a small but growing number of women coming to the rescue of an industry that is the beating heart of Japan's economy. "I can see they're thinking, 'How can such a tiny woman drive a big truck?' " Watanabe, who is 152cm tall, told the Observer as she prepared for the busy run-up to the end of the year. "But I've always loved cars, so it felt natural to want to be a truck driver."

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Negotiations to raise freight rates between transportation companies and shippers have been ongoing in the Chugoku region following new regulations on truck drivers' overtime work in April. These negotiations are part of Japan's response to the 2024 problem, which predicts a decrease in cargo transport capacity due to limits on annual overtime hours (capped at 960 hours). To address this, transportation companies are increasing fares to secure funds for hiring additional drivers and raising salaries for existing drivers who now work fewer hours. However, this increased financial burden on shippers also increases product and service prices.

Suzuki Suisan, an oyster farming company based in Saka, Hiroshima Prefecture, used to offer free shipping for purchases of ¥12,000 or more, but stopped doing so in March. Oysters, a specialty of the prefecture, are frozen in their shells or fried by the company and shipped in boxes nationwide. The company can no longer offer free shipping as freight rates paid to a transportation firm it uses went up last December prior to the start of the overtime regulations. The basic rate, excluding Hokkaido and Okinawa, rose by a blanket ¥55, and the fee for a large delivery to Hokkaido increased by ¥495, or 14%. Suzuki Suisan continued to offer free shipping as part of its services for the first three months after the new rates were introduced, but it was no longer possible to maintain profits.

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Other companies invest in logistics to improve transportation efficiency. I wonder why such steps weren't taken years ago.

Dream Bed, a manufacturer of bedding and other products in the city of Hiroshima, introduced a system in April for sharing vehicle dispatch information with transportation firms. Under the system, Dream Bed coordinates the volume and timing of shipping in accordance with available vehicles at transportation companies, thereby reducing idled time on both sides. Nonetheless, the firm plans to raise product prices by September as raw material and fuel costs are increasing in addition to logistics costs. JMS, a medical equipment manufacturer in the city of Hiroshima, introduced pallets in April to load some of the products it sends from its plant in Izumo, Shimane Prefecture, to the Kanto region. The aim is to ease the burden on drivers when loading products.

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Geihoku Kyuso, a logistics company in Hiroshima, has implemented a smartphone app that allows its drivers to manage work hours. The app features ten distinct icons representing various work statuses.

1. Clock Icon: Indicates the start of work.
2. Break Icon: Represents break time.
3. Lunch Icon: Indicates lunchtime.
4. Restroom Icon: Used when drivers need to take restroom breaks.
5. Maintenance Icon: Indicates vehicle maintenance or repair.
6. Delivery Icon: Represents delivery tasks.
7. Loading/Unloading Icon: Used during loading or unloading of goods.
8. Waiting Icon: Indicates waiting time.
9. Return Icon: Used when returning to the base.
10. End of Work Icon: Represents the end of the workday.

This app streamlines work management and enhances efficiency for Geihoku Kyuso's drivers. Using the app, the company maintains the same overall pay level for drivers as a year ago, even though their overtime work has been reduced.

I feel like the restroom button is a bit much.

A study by the Nomura Research Institute forecasts a significant shortage of truck drivers in Japan by fiscal 2030, with a projected 36% fewer drivers than needed to handle the country's logistics needs. This shortfall is attributed to an aging population and recent work reform measures. While the road freight volume is expected to decrease marginally from 1.43 billion tons in fiscal 2020 to 1.40 billion tons in fiscal 2031, the number of truck drivers is anticipated to drop sharply from 660,000 to 480,000, exacerbating the delivery challenges for the projected cargo volume.

The most notably affected regions will be Tohoku in Japan's northeast and Shikoku in the west, which will both see shortfalls of 41 per cent, followed by Kyushu in the southwest at 40 per cent, according to the study. "It will be necessary to improve the efficiency of logistics in order to avoid serious economic effects," said Kazuyuki Kobayashi, the institute's logistics consulting group manager. An overtime limit of around 18 hours per week for drivers of trucks, taxis and buses was introduced in April as Japan looks to improve working conditions in industries struggling with acute labor shortages. While the limit is aimed at preventing overworking, there is concern that shorter working hours will translate into a drop in transport delivery capacity, a fall in service operators' revenue and higher fees charged to shippers, an issue known as the "2024 problem." Given pay increases due to driver shortages and rising fuel prices, the institute also estimated that transportation costs borne by shippers will rise 34 per cent between fiscal 2022 and fiscal 2030.

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