How an automated highway could help Japan's logistics industry

The global rise of e-commerce (EC) has driven an increase in demand for logistics. In Japan, the Ministry of Land, Infrastructure, Transport and Tourism (MLIT) reports that over the past 20 years, the number of logistics transactions has nearly doubled, while the average cargo size per shipment has halved, resulting in smaller and more frequent deliveries. Parcel deliveries in the EC market have risen by 23.1% over five years, reaching approximately 5 billion parcels in 2022.

However, Japan is grappling with a severe labour shortage in the logistics sector, making it increasingly difficult to keep up with growing demand. Starting in April 2024, the government introduced regulations to limit truck drivers' working hours, aiming to improve working conditions and safety. While this is a positive step, it is expected to reduce the hours drivers can transport cargos and make deliveries, creating a significant logistics challenge known as the “2024 problem”, which could disrupt reliable delivery.

The truck driver workforce, which peaked at 980,000 in 1995, is projected to decline to about 520,000 by 2030, widening the logistics gap to an estimated 34%. To address this labour shortage, some companies have resorted to having managers and executives assist with tasks including loading, unloading, and even driving.

Another critical issue is the need to improve transportation efficiency. The average “loading ratio,” which measures how much of a truck's maximum capacity is utilized, currently stands at just 38% on average. Enhancing the efficiency of the entire logistics process, including reducing loading and unloading times, has become an urgent priority.

The Japanese government is taking steps to address challenges in the logistics sector by setting specific numerical targets to improve operational efficiency. The MLIT, along with the Ministries of Economy, Trade and Industry and Agriculture, Forestry and Fisheries, has set a goal to reduce daily cargo waiting and handling times from three hours to two hours by 2028, with each load limited to one hour. Additionally, the government aims to increase the average truck load ratio from the current 38% to 44%, with a target of achieving a 50% load ratio for half of all trucks. To support these objectives, subsidies will be provided for necessary investments, and operators nationwide will be monitored periodically to track progress.

To address the anticipated decline in truck drivers, plans to construct an “Autoflow Road” are underway. These are specialized lanes on existing highways, utilizing the median and shoulder areas to operate large unmanned guided vehicles for loading and transportation. The government has established a study group to advance this initiative. Similar projects to this system include Switzerland’s logistics tunnels, where automated carts transport goods between major cities.

In July 2024, the government announced plans to conduct social experiments on Autoflow Road by fiscal year 2027. According to an interim report released simultaneously, these trials will focus on developing technologies for optimal travel speeds and stable transportation, road impact analysis, and automatic loading and unloading. By 2034, experiments are planned for highways in suburban areas near major cities prone to congestion.

In addition to addressing labour shortages, the system will operate 24/7 with few or no workers, improving efficiency through advanced transportation planning. Future steps include establishing operations between Tokyo and Osaka, Japan's two largest cities, positioning the system as one of the key transportation methods for cargo. Estimates suggest that up to 26% of goods currently transported by trucks, including food and clothing, could shift to Autoflow Road, making this system a highly anticipated game-changer in logistics.

Private companies are also advancing in this field. Panasonic Operational Excellence, the logistics division of the Panasonic Group, T2 Corporation, a developer of self-driving trucks and transportation services, and Mitsui Warehouse Logistics are collaborating to create a new transportation system using autonomous trucks. Starting in January 2025, the three companies will conduct demonstration tests of automated truck transportation under the supervision of human operators, leveraging their expertise in logistics, operational optimization, and autonomous driving technology. Their long-term objective is to introduce fully unmanned trucks in the future.

The World Economic Forum’s Global New Mobility Coalition predicts a 78% increase in last-mile deliveries by 2030. To meet this growing demand, automation and streamlining of the entire logistics process are crucial.

Efforts in Japan align with global movements towards creating a safer, cleaner, and more inclusive supply chain as described by the Forum’s initiative, Supply Chain, Logistics and Transport Industry Community. Japan’s innovations in logistics could contribute globally, as a model for building more efficient and sustainable systems.