I am Satoshi Fujita, a consultant for small and medium-sized enterprises. Based on my experience in providing comprehensive management support from large corporations to small and medium-sized enterprises, I will share insights into the "unknown aspects of famous companies" in depth.

The 2024 issue has triggered a major transformation in the logistics industry. Japan Post, the largest logistics company in Japan, has agreed to collaborate with Seino Holdings, the industry's fourth-largest player, on long-distance transportation. Yamato Holdings has entrusted some of its operations to Japan Post and terminated contracts with a large number of individual businesses. Amazon Japan is cautiously proceeding with contracts with individual businesses. Amazon Japan is building its own vast logistics network.

Japan's unique situation of "low loading efficiency" compared to Europe

The 2024 issue in the logistics industry, in simple terms, is the reduction of truck driver working hours. Starting April 1, overtime work hours were capped at 960 hours per year. This regulation, known as "work style reform," was already introduced for large companies on April 1, 2019. However, in industries such as logistics, construction, and healthcare, long working hours and a severe labor shortage were so prevalent that a grace period was set. That grace period has now ended.

According to Japan's "Study Group for Realizing Sustainable Logistics," the shortage of transportation capacity due to the overtime work hour cap regulation is estimated to reach 14.2% in 2024 and 34.1% in 2030. This projection assumes no countermeasures are taken for the current transportation system. Japan has a complex topography and includes areas where transportation is difficult, such as islands. Additionally, various companies, including small and medium-sized enterprises, have unique logistics networks.

According to the Ministry of Economy, Trade and Industry, Japan's truck loading efficiency is 39%. Europe's is 57%. ("Survey on Competitive Environment and Labor Environment in the Logistics Market"). Logistics in Japan is complex and inefficient. The partnership between Japan Post and Seino stems from this background. It is an effort to improve the efficiency of long-distance transportation.

Japan Post is utilizing its logistics infrastructure to the fullest...

Japan Post and Seino utilize adjacent hubs to stack and exchange cargo. This is expected to enhance efficiency, particularly during weekends when loading rates are lower. Pilot operations have yielded positive results, reducing the number of trucks without altering delivery times.

In June 2023, the Japan Post Group reached a basic agreement with Yamato Holdings for collaboration. This involves gradually phasing out Yamato's "Neko-pos" (Cat Postal Service) and entrusting its operations to Japan Post. The newly born "Neko-pos Mail Packet" involves Yamato accepting packages from customers and delivering them to designated locations, from where Japan Post handles the subsequent delivery.

Japan Post faces a major weakness in its inability to easily reduce post offices nationwide. Former President Hiroya Masuda sparked a major controversy when he mentioned the closure of post offices. Reducing the number of post offices, which serve as logistics and financial infrastructure for local residents, has faced opposition and concerns from local assembly members, local governments, and others since before the company's IPO. Therefore, Japan Post must strive to maximize the utilization of its established network. Through collaboration with Yamato, the number of mail packets handled in the March quarter of 2024 increased by 3.0% year-on-year to 1 billion. Handling volume had been on a declining trend, but it recovered to the level of the March quarter of 2021, benefiting from the online shopping boom.

Japan Post is hoping to improve the efficiency of long-distance transportation by utilizing its intricate last-mile logistics network through collaboration with Seino. Japan Post's efforts to enhance efficiency while maximizing its delivery network are a challenging task compared to other companies.