Time flies and it is July from this week, and we have entered the second half of the year. In Kansai, the unpredictable and irregular weather continues to persist and I don’t know if it is rainy season or not.
By the way, there is a growing movement to reduce or abolish bus services. Background factors are labor shortage, aging (the average age is over 50), and labor environment and working conditions. Due to labor shortage in a type of industry such as construction, transport, tourism, and nursing care, bankruptcies are increasing rapidly, especially among small and medium-sized enterprises. The service industry accounts for about 70 % of all employees, and is also promoting the use of foreign workers to make up for the labor shortage, but it is not so easy because they have a language problem and are internationally in a seller’s market. The labor shortage is not a transient issue but a structural issue, and there is a concern that the situation will become even more serious.

■■What I have recently thought and focused on:
■The seminar was held:
I served as a seminar lecturer for the first time in a while this week. The title of the lecture was “future management strategy in the transport and logistics industry”. Focusing on the trucking industry where I had been involved for many years, the main contents were as follows. ① “the critical role of logistics” ② the environment surrounding logistics in Japan ③ “the current situation in the trucking industry” ④ “the countermeasures for driver shortage in the trucking industry” ⑤ “2024 issue” ⑥ “the necessity of structural reform in the trucking industry” ⑦ the recent movement in the trucking industry such as M&A and business succession. The trucking industry from now on simply depends on the result of shaking factors conflicting light and dark as follows.
◎Problems and subjects faced by the industry:
(1) Due to low birth and multiple deaths and declining birthrate and aging population, we have entered a population decline society, and quantitative expansion of domestic logistics is not expected. New industry is high-tech oriented and the volume is not expected.
(2) Due to companies’ shift to overseas production, industrial hollowing-out is progressing in Japan.
(3) The logistics is changing from “grand and profound” to “trivial and insignificant” and “frequency, wide variety, small amount and short delivery time”, and it takes more and more manpower.
(4) Securing a workforce including driver and human resources is going to be tougher. As far as foreign workers are concerned, there are various unsolved problems and we can’t expect too much.
(5) An excessive competitive nature is inherent due to excess number of business operators, and revision of freight rates with shippers and improvement of working conditions don’t go smoothly.
(6) Responding to tightening of regulations by Japanese government such as “working hours regulations” (2024 issue and so on).
(7) Due to rationalization of production for producers and rationalization of logistics (improved load ratio) for major logistics operators, being phased out of small and medium-sized enterprises will progress.
(8) Securing the necessary financial resources and human resources for digitalization and computerization necessary for business continuity and for investing in assets.
◎Positive factors for the industry from now on:
(1) In addition to declining birthrate and aging population, due to the trend to avoid dirty, dangerous and difficult job, youth entry is not progressing. The result is driver shortage and the shortage of manpower, and leads to the decline of transportation capacity, in other words, lack of loading space and tightening of supply. Reception of “proper freight” and improvement of working conditions will progress.
(2) Due to reorganization and consolidation, and bankruptcy, withdrawal and closure, the number of business operators will decrease and an excessive competitive nature will be improved.
◎Change in awareness for logistics and the role of government:
(1) Relevant government offices work together and it is necessary to implement a change in awareness for the role and importance of logistics for shippers and consumers (Separating garbage is a good example). And it is necessary to establish the perspective that “the service is paid” and “good service costs a certain level of money” (The tipping in the United States is one example).
(2) As far as inevitable cost increases such as the rising cost of raw material and fuel prices and large fluctuations in exchange rates beyond the scope of cost absorption through management efforts of business operators are concerned, it is ultimately necessary to establish a system for passing on the costs to consumers like a consumption tax. In other words, it is necessary to think in a different way from “cost cut” deeply ingrained due to many years of deflationary economy to “price up”. The concept of promoting and sharing such ideas not only within the industry but also among the citizens is essential. Incidentally, in the United States, as far as increased costs of crude oil and raw materials importing from overseas beyond the cost absorption through business efforts are concerned, customers or shippers accept price increases comparatively smoothly. This point is reflected in the fact that wholesale price (corporate goods price) and consumer price work together almost simultaneously. But in Japan, there is a significant time lag in the movement of two price indexes. In other words, there are excessive competition and structural factors such as multi-layer structure and so on between producers and consumers, and price-passing through is not progressing well. I feel the difference in business between Japan and the United States around here and the excessive competition due to excessive number of companies within one industry. In capitalism and market economy, if we don’t accept some level of inflation, the economy does not turn (We fall into deflation).

■The election to decide the governor of Tokyo and an excessive concentration to Tokyo:
In Tokyo, a hot battle toward voting for this weekend’s election to decide the governor of Tokyo is being waged. It is interesting to see who will be chosen as the runner-up. By the way, Tokyo has a population of 14.1 million (Osaka has a population of about 8.8 million), and annual tax revenue is about 6.4 trillion yen in the 2024 initial budget, and the budget size is about 16.5 trillion yen in general accounting and special accounting total (in case of Osaka, about 7 trillion yen). This is on a scale comparable to Sweden’s national budget (19 trillion yen) and Czech’s national budget (14.4 trillion yen). There are about 33,000 employees of the Tokyo Metropolitan Government alone and if including school staffs, police staffs and firemen, there are 166,000 employees. It is a big organization. The expansion of Tokyo and the excessive concentration to Tokyo have the benefit of convenience and efficiency, but on the other hand, it is necessary to recognize extreme vulnerability to various risks including Tokyo inland earthquake and recognize that there is a risk to lose state function and city function.

■Issuing new bills:
On July 3, new 10,000-yen bill (the portrait is Eiichi Shibusawa). new 5,000-yen bill (the portrait is Umeko Tsuda) and new 1,000-yen bill (the portrait is Shibasaburo Kitasato) were issued. The renovation has been done for the first time in 20 years. It seems that 60 % of domestic settlements in Japan still rely on cash payments, despite the increased adoption of cashless payments after the corona disaster. It is said that costs associated with renovating Automated Teller Machines (ATMs), vending machines and money-changing machines are 500 billion yen at least. By the way, it is said that the current money circulation in Japan is 121 trillion yen, and among them 60 trillion yen is money under the mattress that is cash to store in a safe at home. It seems that fraud such as “old bills will not be usable and deposits will be blocked” or “I will exchange old bills for new bills” has been already rampant, targeting this, and a lot of elderly people are being victimized. It makes me realize the state of the world like “so many enemies (frauds) in daily life!”.