The Daily Manila Shimbun


Parcel delivery services at turning point

June 7, 2017

Tokyo- The widespread use of online shopping has brought "takuhai" door-to-door parcel delivery services in Japan to a turning point, with steep increases in deliveries causing an acute shortage of truck drivers and making it difficult for service providers to continue customer-friendly operations.
Industry leader Yamato Transport Co. will raise basic shipping fees by 140 to 190 yen, or an average of around 15 pct, on a pretax basis in September. The increase will be the first in 27 years not prompted by consumption tax hikes.
Yamato also hopes to cut its number of deliveries to 1,785 million parcels in the current fiscal year to March 2018, down 4.4 pct from the previous year.
For example, Yamato has cut the hours it accepts requests for the redelivery of undelivered items on the same day. Effective in June, it has abolished designated-time delivery services from noon until 2 p.m., so that truck drivers can take lunch breaks.
Takuhai services were started by Yamato in 1976. While Yamato has captured roughly 50 pct of the market, many of its drivers have been forced to work overtime without pay because of steep increases in deliveries.
Faced with growing pressure to shift priority from operational expansion, Yamato will redesign its business model to "match the times," Yutaka Nagao, president of the Tokyo-based company, said.
Other takuhai service providers are starting to follow suit. An executive of SG Holdings Co. said the parent firm of Sagawa Express Co. will continue negotiations with corporate customers to "make fees more appropriate," suggesting that it will seek to raise shipping charges.
Japan Post Co. and others may also raise their shipping fees.
Fee increases planned by Yamato will likely have a great impact on e-commerce companies such as Amazon Japan G.K. Yamato will determine new fares for such large-lot corporate customers based on the service volume and workload of drivers.
Door-to-door delivery operations for e-commerce companies impose heavy burdens on drivers as they often involve redeliveries. Yamato therefore is expected to raise charges for such companies by more than 15 pct and ask them to adjust shipments, including the bundling of packages, during busy periods.
Some e-commerce companies may be unable to continue free shipping programs for customers as a result.
Yamato's moves to raise shipping fees and reduce the workload of truck drivers will end up raising costs for users of its service. (Jiji Press)