May 28, 2014 4:07 am JST

Ajinomoto to switch to ships, rail for long-distance freight

TOKYO -- Ajinomoto will use marine shipping or rail instead of trucks for nearly all shipments of processed food over distances of more than 500km as of fiscal 2016, aiming to cut costs as a shortage of drivers pushes up fares.

     Starting in June, the Japanese company will gradually switch over to cargo ships for transporting such products as instant soups and powdered flavorings along three major routes, marking its first time using marine shipping for in-house freight. It will also make broader use of rail.

     It plans to slash its use of trucks for shipments over 500km or more from 54% to 13% this fiscal year. In fiscal 2016, it will stop all use of trucks for long-distance transport, excluding some trips between factories and ports.

     To spread out the risks posed by a large-scale disaster, Ajinomoto will set up in June two logistics hubs, in eastern and western Japan. Products from its eight factories across the country will be shipped to the hubs first, increasing its use of long-distance freight by 8%.

     The Ministry of Land, Infrastructure, Transport and Tourism projects a shortage of 140,000 truck drivers next year. Japan's low birthrate means fewer people are entering the workforce, and rising pay in such industries as construction is expected to lure workers away from trucking.

     Ajinomoto assumes that truck freight rates will jump 20% in 2015 compared with now. Although new maritime shipping contracts are currently more expensive than trucking, the contracts will lock in fares for a certain period, making them cheaper in comparison next year, according to the company.

     Because drivers will also be tougher to secure, it aims to use ships and trains to ensure a stable distribution network.

     The shift away from trucks will cut the company's carbon dioxide emissions from long-distance freight in half, to around 2,400 tons a year.

(Nikkei)

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