January 17, 2017 6:05 am JST

Japan to subsidize pickup lockers to reduce parcel deliveries

Online shopping, shrinking workforce pushing logistics industry to the limit

Public funds will help pay for parcel pickup lockers to help cut down on unnecessary redeliveries.

TOKYO -- With the boom in internet shopping imposing a heavy burden on Japanese logistics providers, the government will start subsidizing the installation of pickup lockers at train stations and convenience stores, with an eye toward reducing repeat delivery runs.

About 500 million yen ($4.38 million) has been allocated under the draft fiscal 2017 budget for the scheme, which launches in April. The government will shoulder half of the estimated cost of 1.5 million yen to 2 million yen per location to install the lockers, which allow packages to be left securely for consumers to pick up at their convenience. Only ones that accept deliveries from any logistics company will qualify for the subsidy. The goal is to set up about 500 new locations in the first year.

Small-lot deliveries in Japan surged 10% over five years to 3.7 billion in fiscal 2015, thanks to the growing popularity of e-retailers. But the rise in single-member and dual-income households means fewer people at home to receive the shipments. About 20% must be delivered again -- a task said to require an annual 90,000 workers, or 10% of those in the field.

Logistics companies worry that the growing personnel shortage, coupled with an increase in online shopping, will make their delivery networks difficult to maintain. Parties including the ministries overseeing the economy, transportation and the environment are together supporting efforts to cut down on redeliveries.

The Ministry of Economy, Trade and Industry hopes to revise legislation by year-end so that such e-commerce businesses as online retailers must comply with energy conservation standards. It will also have e-tailers make efforts toward setting up parcel pickup lockers.

Some companies are already making progress. Yamato Transport and Japan Post began installing such lockers at East Japan Railway stations last June so that consumers can pick up packages during their commutes. The Yamato Holdings unit and the Japan Post Holdings group member aim to set up 100 or so Tokyo-region locations in the first year.

Virtual mall operator Rakuten has delivery lockers in 23 locations nationwide for products ordered on its shopping site. Found mainly at Tokyo train stations, each installation has 10 to 20 compartments.

Others are working on ways to ensure that someone is around to receive the package. Askul uses a smartphone app to send notifications to customers shortly before orders through its Lohaco site are delivered.

METI will urge online retailers to expand timed-delivery services beyond just some fee-paying customers. It will also push logistics providers to boost efficiency by communicating with customers and working out ideal times before heading out for delivery.

(Nikkei)

East Japan Railway Co.

Japan

Market(Ticker): TKS(9020)
Sector:
Industry:
Transportation
Railroads
Market cap(USD): 34,707.06M
Shares: 389.40M

Yamato Holdings Co., Ltd.

Japan

Market(Ticker): TKS(9064)
Sector:
Industry:
Transportation
Air Freight/Couriers
Market cap(USD): 8,970.36M
Shares: 411.34M

Japan Post Holdings Co. Ltd.

Japan

Market(Ticker): TKS(6178)
Sector:
Industry:
Finance
Life/Health Insurance
Market cap(USD): 58,905.08M
Shares: 4,499.99M

Rakuten, Inc.

Japan

Market(Ticker): TKS(4755)
Sector:
Industry:
Consumer Services
Other Consumer Services
Market cap(USD): 14,099.33M
Shares: 1,432.51M

ASKUL Corp.

Japan

Market(Ticker): TKS(2678)
Sector:
Industry:
Retail Trade
Internet Retail
Market cap(USD): 1,592.46M
Shares: 55.25M

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