Sunday, March 5, 2017

Japan in Depth / Delivery firms feel pressure of expanding volume

A rapid increase in the home delivery of parcels has taken its toll on the logistics industry. It is common for delivery service employees to work long hours amid what has become known as a triple problem — growth in online shopping, increasing redeliveries due to recipients being away, and a shortage of truck drivers.
Japan’s home delivery services, which characteristically present an image of “secure handling and reliable delivering” of items, are in a difficult situation.
3-fold increase in 20 years
According to the Land, Infrastructure, Transport and Tourism Ministry, home delivery services handled about 3.745 billion parcels in fiscal 2015 — about three times more than 20 years ago. In terms of the number of items, they are reaching their capacity.
“The online shopping market is experiencing extreme growth, and we cannot secure enough human resources,” said a labor union executive of Yamato Transport Co., which has an about 50 percent share of the home delivery service market. The number of parcels handled by Yamato for the fiscal year ending this month is expected to reach a record 1.87 billion — up 8 percent from the previous fiscal year.
An increase in parcels would normally be welcomed. But in this year’s labor-management wage negotiations, the Yamato labor union made an exceptional request that management put a cap on parcel volume. The management side is taking the situation seriously and considering measures. Yamato is likely to drastically overhaul the working hours of drivers handling specified-time deliveries as part of efforts to improve working conditions such as long working hours.
The firm will consider making changes to specified-time deliveries from 8 p.m. to 9 p.m., including eliminating the time slot. It will also consider changing time slots during the daytime to allow drivers to take lunch breaks.
While ensuring convenience for customers, Yamato also aims to improve working conditions for its drivers.Yamato started delivering items from Amazon Japan G.K., a major internet shopping company, in 2013. Since then, the number of items Yamato handles has increased — with long working hours becoming a fixture.


Previously, one employee working overtime would be sufficient to cope with the after-6 p.m. period. Currently, however, many staff must work overtime to handle specified-time deliveries.
During the busy year-end period, the labor union was flooded with telephone calls from workers saying they could not cope with the volume. There were delivery delays during this period.
The rapidly increasing volume of redeliveries — estimated to account for 20 percent of all deliveries — has compounded the situation.
Innovative measures
In response to serious complaints from workers, Yamato has hired more homemakers and others, who live near apartments where there are many deliveries, as part-time employees. These people help to sort and deliver items so Yamato can better handle mornings, when many elderly people and housewives are at home. This measure is aimed at helping to reduce the number of redeliveries.
There are currently about 10,000 female Yamato staff, and they have become a valuable human resource.
Delivery service companies other than Yamato are also searching for the best way to deal with the situation. Japan Post Co., which is ranked third in the industry, has started selling delivery lockers for detached houses in cooperation with Daiwa House Industry Co. The lockers allow staff to deliver parcels when recipients are not at home.
East Japan Railway Co. is planning to set up delivery lockers at about 100 stations in the Tokyo metropolitan area. Users will be able to collect items nearby their workplace or at the closest station to their home at any time.
Chronic worker shortage
Still, many issues remain. Competition with other industries to secure human resources has intensified as the domestic economy recovers and companies offer more job openings.
The logistics industry — in which employees are required to be physically strong and have a certain level of driving skill — suffers from a chronic personnel shortage. The average job-opening ratio across all industries in 2016 stood at 1.36 to 1; for driving jobs, including home delivery services, the ratio significantly exceeded 2 to 1. The perception of long working hours in the logistics industry is a factor behind why it lags other industries in securing human resources.
An executive at a major logistics company expressed concern, saying, “At this rate, we can not maintain the home delivery system’s high standards, which set a global precedence in terms of precision.”
Yuji Yano, a professor of logistics theory at Ryutsu Keizai University, insists there needs to be a change in the mind-set of online shopping companies and consumers. “Reforms are rquired, such as recipients paying for redeliveries,” he said


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