Japan Third-Party Logistics (3PL) Market - Growth, Trends, COVID-19 Impact, and Forecasts (2023 - 2028)

Japan Third-Party Logistics (3PL) Market - Growth, Trends, COVID-19 Impact, and Forecasts (2023 - 2028)

During the time frame of the forecast, the Japan third-party logistics (3PL) market is expected to register a CAGR of more than 7%.

• The COVID-19 epidemic had a direct effect on logistics companies, which move, store, and move goods.Logistics companies help businesses do business and get their products to customers. They became an important part of value chains both inside and outside of national borders. Hence, supply chain interruptions brought on by the pandemic could affect the sector's competitiveness, economic expansion, and job creation.
• Japan has made a lot of progress in the supply chain space over time. For example, it has embraced digital technologies to change a traditional industry. In the last few years, the social and economic factors that affect logistics have changed a lot. These factors include a shrinking or aging population, new ideas in some areas, more frequent deliveries of smaller goods, and different customer needs. In Japan, there is more demand for 3PL as large companies look at how their logistics networks work and outsource more tasks to 3PL providers to cut costs and improve efficiency.
• 3PL logistics firms are the ones who run supply chains and get materials and goods to all industries and consumers. Japan, one of the biggest economies in East Asia, relies on 3PL logistics a lot because of its manufacturing industry. As a result, organizations like Yamato Holdings are among the top logistics providers globally. 120 million people in the archipelago handled 4.71 billion tons of domestic freight, and foreign trade added 900 million tons more.
• Since 2000, there has been a big rise in the need for large, modern logistics leasing facilities in Japan. Outsourcing logistics operations, imbalances in corporate real estate, and moving out of multiple old warehouses all contributed to the rise. The freight and logistics industry in Japan is a big part of the economy, making up more than 5% of the GDP.
• The logistics business is known for its fierce cost competitiveness. To outbid rivals, sophisticated coordination and economies of scale are required. Through the use of "third-party logistics," sometimes known as "3PL," logistics firms have begun to streamline their operations. Automation and artificial intelligence (AI) are further tools for cost control.

It's likely that the logistics systems industry will grow to include more of these technical solutions. Although automated warehouses are now in use, it will be some time before fully autonomous trucks are allowed on the roads. Automation advancements cannot arrive soon enough for Japan. Its logistics sector is experiencing a manpower deficit, and on top of that, drivers are aging quickly, endangering the availability of services at fair prices. Two goals of this effort are to increase productivity in the trucking sector and to foster work environments that attract and retain older and female drivers. It has to be seen whether this tactic stabilizes the market effectively enough until automation advances further.

Japan has always been and is one of the global leaders in the manufacturing machinery and automobile industries. The Ministry of Economy, Trade, and Industry (METI) says that high-tech manufacturing is one of Japan's most important growth sectors. The core areas in Japan's manufacturing sector are consumer electronics, automobile manufacturing, semiconductor manufacturing, optical fibers, optoelectronics, optical media, steel and iron, and copy machines.

Since a long time ago, Japan has been one of the top exporters of cars in the world. It is known for its high-quality manufacturing and efficient logistics services. Its highly developed infrastructure and port network support its status as an exporting giant, as do its dense concentration of shipping lines.

Some of the major players in the automotive industry in Japan also have in-house logistics arms. Vantec, a leading automotive logistics provider in Japan, operates under the HTS Group. The Vantec Group supports the sequential supply of auto parts in full alignment with the complex logistics requirements of automotive manufacturers.

As per Hino Motors, the future mobility society to be considered is represented by the word "SPACE". "Shared (sharing of movement, space, and time)" "Platform (corresponding to various services freely) and "Autonomous (free from driving)" "Connected (connecting mobility with people, things, and cities)" "Electricity" (increase efficiency and flexibility).

Japan is the second-fastest-growing mature pharmaceutical market in the world, following the United States. The international interest in the Japanese pharmaceutical market will create opportunities for cold chain logistics service providers. The companies in the country are heavily improving and updating their services through deals, partnerships, and agreements with competitors and companies that provide platform services to the 3PL companies.

The cold chain market is also known for the amount of energy required in the process and the huge amount of emissions that occur. The companies are setting up logistics centers and transforming vehicles into ones that are environment-friendly, produce minimum emissions, and run on sustainable sources of energy.

The Government of Japan and the United Nations Children's Fund (UNICEF) gave three refrigerated vans to the Ministry of Health and SAMES on February 20, 2022. These vans will be used to move vaccines.At the SAMES compound in Dili, Masami Kinefuchi, the Japanese ambassador to Timor-Leste, and Ainhoa Jaureguibeitia, the deputy UNICEF representative, gave the vehicles to Sr. Bonifacio Maucoli dos Reis, the vice minister of health.

Moreover, walk-in cool rooms have been provided and are currently being installed at all regional warehouses in the municipalities of Ainaro, Baucau, Bobonaro, and the Special Administrative Area of Oecusse. It is important to have refrigerated vans, walk-in coolers, and freezer rooms with all of their parts so that vaccines can be kept safely and quickly sent to towns and medical facilities.

The market is pretty small, and its biggest players are Yusen Logistics, Expeditors, DHL, Hitachi Transport System, and Kuehne Nagel. Retail and manufacturing companies that handle their own logistics also play a big role in the market.

Japan's e-commerce market is growing at a rate that has never been seen before. This is reflected in the rapid growth of value-added services in Japan.As a result, packaging, labeling, and sorting activities have seen a large spike in the Japanese logistics industry.

To deal with the high demand and lack of workers in the country, steps can be taken like joint or shared delivery, which sends goods from multiple companies to common delivery points, platform apps, which help delivery companies find drivers with empty truck space and shippers, the use of small warehouses in cities as intermediate distribution centers, and collection logistics.

The goal of the changes in the logistics industry, like the use of self-driving machines and vehicles, is to get rid of the sector's carbon footprint on the economy as a whole.

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