Japan Govt to Review “Free Shipping” Offers to Tackle 2024 Problem

Jiji Press

11:24 JST, June 3, 2023

Tokyo, June 2 (Jiji Press)—The Japanese government on Friday announced a plan to review the practice of online shopping sites and others offering “free shipping,” so that transport companies can charge appropriate fees.

The plan was included in the government’s policy package for tackling the so-called 2024 problem in the logistics industry, or anticipated further truck driver shortages in line with overtime regulations that are set to come into effect next year.

Whether such efforts can gain the understanding of consumers is seen as a major obstacle in achieving the goal.

The Japan Trucking Association has been emphasizing in online advertisements the existence of transportation costs, with ads proclaiming, “There is no ‘free shipping!’”

“Shipping fees are actually included in product prices,” an association official said regarding mail order service operators that offer free shipping. “The labeling of shipping costs as ‘free’ is making light of logistics.”

The official welcomed the government’s plan as a step forward.

Raising wages by charging appropriate transport fees is one of the main measures that could be taken to tackle the 2024 problem. Still, 90 pct of trucking companies are small businesses, and their bargaining power over consignor firms is weak.

“We need to make sure that the consumers behind the consignors understand logistics costs,” in order for higher transport fees to be charged to offset costs including soaring fuel and materials prices, an association official said.

Meanwhile, many mail order businesses are reluctant to carry out major reviews of free shipping offers.

“Free shipping is the standard, so there’s a fear that products won’t sell if buyers are charged,” Toru Mukai, chief of the Japan Direct Marketing CRM Association, an industry body, said.

Whether the practice can be changed “depends on consumers’ acceptance,” Mukai said.

Detailed steps for the government’s plan have yet to be decided, with a transport ministry official noting that “appropriate ways to (carry out the review) will be considered, while discussions are held with industries.”

Many are focusing on how much binding power the government’s measures will have.