Transforming Logistics: Navigating the Challenges and Embracing Sustainability

Title: Transforming Logistics: Navigating the Challenges and Embracing Sustainability

In the ever-evolving landscape of logistics, the year 2024 marked the beginning of a significant paradigm shift rather than a conclusion to the challenges faced by the industry. The intricacies of the 2024 problem have transcended into the early stages of a broader discourse, and companies are already gearing up for the subsequent challenges, notably the 2030 problem.
As a key player in the logistics sector, our company has been actively engaging with retailers to address the specific challenges posed by the 2024 problem. Discussions have delved into the nuances of lead times, questioning the necessity of same-day deliveries and emphasizing the need for a thorough dialogue on the practicality of next-day deliveries versus a two-day window. Recognizing that traditional practices alone won't solve these issues, we are seeking understanding from retailers. Moreover, our involvement with the Japan Processed Food Wholesalers Association involves ongoing discussions among manufacturers, retailers, and wholesalers to devise comprehensive strategies for maintaining the integrity of the entire supply chain.

At the forefront of these efforts is our executive officer, Mr. Kotaro Kotani, who serves as a coordinator in these discussions, ensuring a holistic approach across the upstream, midstream, and downstream segments of the supply chain.

Navigating through the challenges of coordination across different segments is undoubtedly a daunting task, but Mr. Kotani remains unfazed, stating that there have been more challenging situations in the past. The current scenario indicates an increasing understanding from retail partners, and the widening scope of the 2024 problem suggests its resonance with the general public, going beyond the confines of logistics discussions that were previously overlooked.

The policy package addressing the 2024 problem has been unveiled, featuring standardization alongside policies advocating collaboration and mutual cooperation. Logistics collaboration, especially among similar businesses facing analogous situations, poses a considerable challenge amidst competitive relationships. However, recognizing shared struggles, our company is exploring collaborations in sparsely populated regions where challenges persist. The potential for collaboration extends beyond the industry, as interactions with companies handling entirely different commodities have unveiled common concerns in logistics. Initiatives such as sharing truck capacities have been initiated, with the aim of optimizing the efficiency of asset utilization.

A significant contributing factor to the transportation capacity shortage, one of the central issues of the 2024 problem, is the low loading rate of trucks. Efforts are underway to increase the turnover and operational rates of trucks, with an ideal scenario being 100% utilization for 24 hours. The stark reality is that the current loading rate of trucks is below 40%, with a substantial portion, approximately 60%, of the capacity transporting air. Addressing this challenge requires a focus on both the complexity of modern logistics and the quality issues associated with loading rates. Our company is actively engaged in visualizing and optimizing loading rates, using dynamic management systems to gather data for comprehensive visibility.

The initiative to improve loading rates starts with visualization. Previously, there was little consideration for understanding how much space was available in trucks. The introduction of dynamic management systems in many trucks has facilitated this visualization, allowing for better planning and coordination, especially in collaborative deliveries where quick responses to questions about available space are crucial.

On the sustainability front, our company has undertaken specific measures to build a sustainable logistics structure, maximizing limited resources. Four key initiatives have been set in motion: reducing driver wait and unloading times, improving vehicle delivery efficiency, enhancing vehicle loading efficiency, and collaborating on lead time extension and reconsidering delivery conditions through coordination with manufacturers, wholesalers, and retailers.

Addressing the issue of driver wait and unloading times involves leveraging the N-Torus system from the Japan Processed Food Wholesalers Association. The goal is to visualize and analyze the actual waiting and unloading times at various logistics centers across the country, using both digital and analog approaches. Notably, the efforts at the White Hill Distribution Center have yielded significant reductions in wait times of over 30 minutes and unloading times of over 60 minutes, showcasing the tangible benefits of these measures.
In terms of vehicle delivery efficiency, a collaboration with Hacobu has resulted in the implementation of a delivery performance visualization tool for approximately 3,500 vehicles in the Kanto region. The aim is to expand this system nationwide, providing a unified approach to optimize delivery efficiency and eliminate inefficiencies that were limited to individual logistics centers.

The endeavor to improve vehicle loading efficiency focuses on utilizing previously challenging-to-utilize truck spaces effectively. Initiatives like the "Trucxing" surplus sharing service, launched in April 2022, aim to share surplus space within our truck transport network to address the challenges faced by transport companies and manufacturers struggling with truck procurement.
Collaboration between manufacturing, distribution, and retail partners has been a key element in our efforts to extend lead times and reevaluate delivery conditions. Discussions and adjustments have been made to accommodate a one-day extension in lead times while considering factors such as adjusted order times and emergency response allowances.

Furthermore, our engagement with three major retail industry groups has evolved into the Food Supply Chain Sustainability Project (FSP). The collaborative efforts, especially with four major supermarkets in the Tokyo metropolitan area, through the Tokyo SM Logistics Research Association, emphasize a collective commitment to sustainable logistics practices.

The recent announcement of our integration with Kyusyu Distribution System signifies a strategic partnership aimed at addressing the challenges of operating refrigerated warehouses. With only one self-operated frozen warehouse, the need for a strategic partnership arose, and Kyusyu's longstanding relationship with our company made them an ideal choice. This collaboration is seen as mutually beneficial, paving the way for innovative solutions and value creation.

In conclusion, the logistics sector is in the midst of a transformative period, addressing immediate challenges while proactively preparing for future disruptions. The importance of collaboration, visualizing and optimizing logistics processes, and embracing sustainability has become central to our approach. As we navigate these complexities, our commitment to building strategic partnerships, implementing innovative solutions, and contributing to a sustainable and efficient logistics ecosystem remains unwavering.

Kotaro Kotani's closing message resonates as a call to action for continued collaboration and innovation within the logistics industry. The dynamism of the current era, marked by technological advancements and a multitude of choices, makes it an exciting time for the logistics sector. As the industry grapples with time constraints, the challenge of optimizing logistics within these limitations remains a focal point. Mr. Kotani's vision of asking Doraemon for an extension of time underscores the persistent struggle with this constraint. However, it is precisely within these limitations that the logistics industry is finding innovative solutions and embracing the challenges that make it the most fascinating field today. The call to join the logistics sector and contribute to its growth and sustainability stands as an invitation for individuals to become part of this dynamic and ever-evolving industry.