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Business trends

Japan's empty bullet trains look to fresh freight for revenue

Railway operator does not expect passenger numbers to return to pre-virus levels

An experiment aboard the Tohoku Shinkansen: Boxes containing fresh fish sent from Sendai Station arrive at Tokyo Station on Aug. 26. (Photo by Shohei Nomoto)

TOKYO -- East Japan Railway, which serves Tokyo and other parts of Japan, plans to use some of its shinkansen as high-speed freight trains as it looks for alternative revenue sources that, like its passengers, won't be scared off by the coronavirus crisis.

JR East, as the railway operator is known, recently announced that it will start transporting goods between outlying cities for the first time. It has been carrying food items from agricultural regions to Tokyo on a trial basis since 2017, catering to demand for swift deliveries of shrimp and other perishables.

Later this month, bullet trains that run between Sendai Station in Miyagi Prefecture and Shin-Hakodate-Hokuto Station in Hokkaido will ferry Miyagi-grown grapes and pears to Hakodate for an event taking place in Hokkaido's third-largest city.

JR East is being forced to look for alternative revenue streams as the virus wreaks havoc with its business. In the April-June quarter, the largest of the seven Japan Railways Group companies suffered a net loss of 155.3 billion yen ($1.4 billion), a drastic plunge from a net profit of 91.5 billion yen for the year-earlier period.

For its passenger services, no recovery is in sight. "The number of train users will not return to pre-coronavirus levels," a company representative lamented.

JR East shinkansen currently keep about six boxes of merchandise in ready rooms, where food carts are also kept and prepared. Since space is tight in these rooms, JR East in August began experimenting with keeping some boxes of merchandise in passenger compartments, many of which have been emptied out by fears of the virus.

Fresh off the Shinkansen: Fresh fish is served at a Tokyo Station sushi restaurant on Aug. 26. (Photo by Shohei Nomoto)

Eventually, once it clears legal hurdles, the operator wants to be able to load 40 boxes per trip.

COVID-19 has decimated Japan's commuter train industry. In August, a peak travel month for Japanese, JR East-operated bullet trains carried 74% fewer passengers than they did in August 2019, according to the company. Other JR East trains that month experienced the same 74% decline.

The drop-off comes as telecommuting takes hold and obviates the need for business trips and for taking the train to work every day.

Even manufacturers have taken measures to keep workers off public transit. Semiconductor maker Disco has started operating its own buses between its Tokyo office and its factory in Hiroshima, more than 800 km away in western Japan.

As of now, JR East only carries food products but hopes to utilize its speed advantage -- bullet trains go at least 240 kph -- for electronic components and other goods.

It is also planning a delivery service that would carry products ordered on its shopping website to customers' homes.

The railway operator also intends to increase the number of its shared workspaces that it has in train stations and hotels from the current 30 to 1,000 by 2025.

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