April 8, 2009

Standard Truck Market Trends
Summary of Results of JAMA’s Fiscal 2008 Survey

The Japan Automobile Manufacturers Association has released the results of its standard truck market survey conducted in fiscal 2008 (ending March 31, 2009).

This survey is conducted once every two years to monitor shifts in demand structure by tracking periods of ownership, purchases, patterns of use, and changes in transport needs. In the latest survey, the impact on users of new laws and ordinances pertaining to trucks was also taken into account.

Specifically, the 2008 survey sought to determine the extent of:

  1. Awareness of, and response to, environmental protection measures such as tailpipe emissions regulations and the enforcement of Japan’s revised Law Concerning the Rational Use of Energy (or Energy Conservation Law);
  2. Awareness of, and potential demand for, advanced onboard safety features/equipment;
  3. The impact of, and response to, the creation of a new truck license category under Japan’s Road Traffic Act; and
  4. The impact of Japan’s declining birthrate and aging population on driver-hiring trends.

Survey results highlighted the following trends:

  • A negative impact on freight carriers resulting from a deteriorating business environment for carrier-hiring operations, with streamlining measures being adopted in response.
  • A drop in the average per-company rate of truck ownership (in units), and the lowest average truck-loading ratio recorded since fiscal 2002.
  • A double priority, for carrier-hiring operators, on fixed-delivery-time service and the ability to deliver on extremely short notice in their selection of freight carriers.
  • The significant impact (65% of respondents) of Japan’s PM and NOx regulations targeting major metropolitan regions, with this impact having extended to owners of trucks that, although registered outside the regulated areas, frequently travel through them.
  • The widespread (over 90% of respondents) implementation of measures to help prevent accident occurrence, with the leading measures being attention to drivers’ health and the provision of onboard safety features.
  • Although less significant than projected (owing doubtless to prevailing economic conditions), the impact of the new category of truck driver’s license on carriers (30%), with an equal percentage also confirming the hiring of older drivers.



JAMA’s Fiscal 2008 Survey of Standard Truck Market Trends
Survey Implementation Outline and Results

1. Survey Implementation Outline

Area of activity surveyed Freight Carriers Carrier-Hiring Operations
Survey area Nationwide Tokyo and Osaka Chiba, Saitama, Kanagawa, Shizuoka, and Aichi prefectures
Survey targets Freight carrier operators Operators involved in construction, manufacturing, wholesaling, and retailing-related transport activities; Shipping service operators
Valid responses 1,151 samples 366 samples
Survey period Mid-August to mid-September 2008 Mid-August to mid-September 2008

2. Survey Results

2.1 A deteriorating business environment for carrier-hiring operations has negatively impacted freight carriers. Streamlining measures are being adopted in response.

  • Over 50% of the carrier-hiring operations surveyed reported that business conditions are deteriorating, with economic stagnation and rising prices for raw materials cited as contributing factors. With over 40% also projecting even worse conditions two years from now, the overall environment appears to have declined significantly compared to 2006 (the date of the last survey).
  • Freight carriers are feeling the impact of these adverse conditions for carrier-hiring operations, with the volume of freight handled by them having declined 6.1% from 2006.
  • Freight transport fees were down only 3.1% from five years ago, showing a recovery trend from 2006. With the timing of this survey being a notable factor*, the problem of higher fuel costs was a significant one for all respondents.
    *The period during which this survey was conducted coincided with a period of steep fuel prices.
  • Under these generally harsh conditions, 25% of respondents said they had raised freight transport fees, while 10% said they had introduced fuel surcharges.
  • Nearly 50% of respondents said they were delaying vehicle replacement purchases and extending rates of vehicle operation. With regard to the hikes in fuel prices, 25% of freight carriers said they were considering joint fuel purchases to help streamline operating costs.

2.2 The average number of trucks owned per company has declined. The average truck-loading ratio was (at the time of the survey) the lowest recorded since 2002.

  • The average per-company rate of standard truck ownership (in units) stands at 11.4 vehicles, a decline of 0.8 units from 2006.
  • Average duration of truck ownership is 10 years, extending the trend in longer ownership periods that has continued since 2002.
  • Only 30% of respondents said their standard truck fleets were in full operation, also marking a decline since 2006.
  • The average truck-loading ratio has declined to 86.3%, the lowest level recorded since 2002. The deadheading rate (unchanged) stands at 35%. Meanwhile, average monthly distances travelled have increased (to 7,180km), but expressway use has declined to an average 33% of total distances travelled.
  • Excellent fuel efficiency performance remains the most compelling reason to consider a truck replacement purchase (for 53% of respondents).

2.3 Carrier-hiring operators are placing a greater priority on fixed-delivery-time service and the ability to deliver goods on extremely short notice.

  • Over 80% of carrier-hiring operations completely outsource their freight transport needs, an increase from 2006 (while other carrier-hiring operators also own their own trucks). The average number of carriers to which they outsource freight transport has likewise grown, now standing at 11.
  • The two leading criteria for carrier-hiring operators in selecting carriers with which to do business are the provision of fixed-delivery-time service and of delivery service on extremely short notice.
  • The first stipulation made by carrier-hiring operators when hiring a carrier is the vehicle tonnage category they wish to be used for the transaction (at 70%, up from 2006).

2.4 PM and NOx regulations have affected a majority of operators, reflecting an expansion in the scope of their impact.

  • Some 65% of respondents reported being impacted by Japan’s PM and NOx regulations. While the impact has declined in regulated areas (i.e., major metropolitan regions) thanks to widespread compliance, it has increased elsewhere (in other words, on operators whose trucks, although registered outside the regulated areas, frequently travel through them).
  • Respondents indicated that key factors in improved fuel-efficiency performance were, first, driver practices (i.e., ecodriving) and, second, the introduction of more fuel-efficient vehicles. As to the impact of Japan’s revised Energy Conservation Law on freight carriers, the promotion of ecodriving was viewed as the priority response in 2006, but in 2008 that was replaced by the need to introduce more fuel-efficient vehicles.
  • For 22% of respondents, anticipated new vehicle purchases would target natural gas (CNG) or hybrid vehicles, with cost being the principal potential obstacle.

2.5 More than 90% of survey respondents implement measures to help prevent accident occurrence involving their vehicles. The priority measures are attention to drivers’ health and the provision of onboard safety features, in that order.

  • Over 90% of respondents affirmed that since 2006, they have strengthened measures to help prevent accident occurrence. Among the various measures cited were attention to drivers’ health, sobriety checks prior to vehicle operation, and confirmation of safe loading procedures.
  • The provision of onboard safety features has also expanded since the last survey in 2006. These include rear-obstacle (back-up) monitoring and digital tachographs. Digital tachographs are also among the safety features whose onboard provision freight carriers are targeting for the near future, along with adaptive cruise control and collision-mitigating braking systems. Meanwhile, carrier-hiring operators look forward to carriers equipping their trucks with lane-deviation warning and lane-keeping assist functions.

2.6 The new category of truck driver’s license has impacted 30% of freight carriers, while an equal percentage are hiring older drivers.

  • Only 30% of freight carriers say they have been impacted by the introduction of the new “middle-category motor vehicle” license for truck drivers. This is less significant than was projected prior to the introduction of the new license category.
  • More serious for freight carriers is the greater insufficiency in the number of drivers licensed to operate “large” trucks (11 tons or more) compared to those licensed to operate trucks in the “middle-category” and “ordinary” classifications, a situation which is not expected to change over the next five years.
  • In terms of the criteria governing driver hiring, the hiring of older drivers ranks second (for 30% of freight carriers) after “greater degree of education/experience.” This reflects Japan’s demographic profile of a rapidly aging population (against the backdrop of a long-declining birthrate).