Prevent strain from being imposed on logistics companies

Editorial

12:33 JST, June 9, 2022

Amid soaring fuel prices, there have been conspicuous moves to shift the burden onto trucking and other logistics companies. It is hoped that the government will strengthen its monitoring to ensure that fuel costs are properly passed on in transaction prices.

The Fair Trade Commission has released the results of a survey on unfair transactions between shippers and logistics firms. As many as 641 shippers have been suspected of violating the Antimonopoly Law, such as by abusing their superior bargaining position and refusing to agree to higher freight charges.

The FTC has conducted on-site investigations of 19 companies suspected of practices called “kaitataki” that shippers use to keep freight charges extremely low.

There are more than 60,000 firms in the trucking industry, which constitutes the backbone of logistics. Of those, 99% are small and midsize enterprises, which have weak price bargaining power. Heinous actions that take advantage of such weakness are unacceptable.

According to the survey, a shipper refused to negotiate a raise in freight charges with a logistics company. As a result, the charges remained unchanged for 40 to 50 years. In another case, workers had wait for more than 10 hours to load goods into trucks, but they were not paid for the waiting time.

With the spread of online shopping, the volume of home delivery orders has continued to rise, a trend that has been accelerated by strong demand from people staying home due to the COVID-19 pandemic. The importance of logistics as social infrastructure is increasing.

However, the wages of truck drivers are said to be 10% to 20% lower than the average for workers in all industries. Their working hours are also long. A situation must be avoided in which burdens from soaring fuel prices become concentrated on workers in the logistics industry.

The labor shortage is also serious, and the number of young people seeking employment in the industry is decreasing. If wage hikes do not progress, distribution functions could be disrupted.

Since 2008, the Land, Infrastructure, Transport and Tourism Ministry has been recommending the introduction of a “fuel surcharge system,” under which freight charges can rise or fall based on fluctuations in fuel prices, as airline fares do. However, companies have rarely adopted this system.

Shippers range widely from manufacturers to retailers and wholesalers. A request by the transport ministry alone has a limited effect to spread the system. The transport ministry, which is in charge of logistics, should work together with other ministries and agencies to ensure that the system is well known to parties concerned and strongly urge shippers to adopt it.

Promotion of streamlining is also important to curb rising logistics costs. It is hoped that the government will support the promotion of digitization to computerize shipping documents and the introduction of robots at logistics facilities, among other measures.

For many years in Japan, the idea that “services are free” has kept the fees paid to logistics service providers low, and the “free delivery” concept has spread in the home delivery field. It is desirable that users, including consumers, renew their awareness of the burdens of distribution costs.

Improving the treatment of workers through efforts to appropriately pass soaring fuel prices to parties concerned will surely lead to a virtuous economic cycle.

(From The Yomiuri Shimbun, June 9, 2022)