Rail Freight in Japan—The Situation Today and Challenges ... · PDF filecontainer trains). About 90% of JR Freight’s rail freight is transported at night. Although JR Freight and

8 Japan Railway & Transport Review 26 • February 2001

Trends in Rail Freight

Feature

Copyright © 2001 EJRCF. All rights reserved.

Rail Freight in Japan—The Situation Todayand Challenges for Tomorrow

Katsuji Iwasa

Freight by Transport Mode

Introduction

Japan Freight Railway Company (JRFreight) was formed in 1987 whenJapanese National Railways (JNR) wassplit up and privatized. For the first 6years, its balance sheet showed promise,but since then it has been in the red duein part to the long recession dogging theJapanese economy.Prospects for railways seem brighter as aviable way to achieve greater distributionefficiency and reduce global pollution.With these trends in mind, I will describeJR Freight’s present efforts to improve itsperformance, and discuss some of thechallenges it faces. The company hopesto bring its operations back into the blackby implementing an improvementprogramme called New Freight 21.

Trends in Japan’sDistribution Industry

The Japanese economy is finally showingsigns of recovery after a long recession,but it is still not clear how the economywill fare in the future. The nation appearsto be heading towards more structuralreforms with more changes in corporates t ruc tu re and merge r s be tween

una f f i l i a t ed compan ies . Thesedevelopments are being promoted by theneed for greater management efficiencyas well as by the movement to internationalizeand computerize operations and torationalize distribution systems.Like other industries, the distributionbusiness is faced with the need forstructural reform. Freight carriers nowface more hurdles than before as thedemand for consumer-friendly distributionsystems grows.Information technologies have developedover the last few years as a way to boostdistribution efficiency. This trend is strongamong manufacturing industries, whichhave embraced supply chain management(SCM) principles in the hope that they canoptimize every aspect of their operationsfrom procurement to production todelivery. Companies are also using theInternet and conducting E-commercetransactions, and are implementingelectronic data interchange (EDI) systemsand distribution information services. Inanother development, providers of third-party logistics services are assuming alarger role within the distribution businessas a whole, offering ways for companiesto reduce inventories and rationalizetheir operations through the use ofinformation systems.

Because of these developments ,customers now expect faster delivery evenwhile freight carriage fees have tended todecline. Meanwhile, the volume of goodstransported within Japan shows no signof increasing. Therefore, the situation forfreight carriers is far from easy.Japan’s distribution market is valued atapproximately ¥23 trillion (¥100 =US$0.84). About half this market is handledby road haulage. On one hand, truckers useroads that are built and maintained withpublic funds, they pollute the air, add to roadcongestion and cause traffic accidents. Onthe other hand, they offer door-to-doorconvenience and flexible routing, explainingwhy they have cornered 54% of Japan’stransportation market, in tonne-km terms.Although trucks play the most importantrole in goods distribution in Japan, theycause serious accidents, and emit nitrogenoxides (NOx), suspended particulatematter (SPM), and other pollutants. Wecan assume that local governments inmany parts of Japan will push forwardwith stricter controls on emissions asdemonstrated by the Say No to DirtyDiesel Vehicles campaign announced bythe Tokyo Metropolitan Government.For its part, the trucking industry suffersfrom a number of structural issues thathave paradoxically supported its growthbut must soon be resolved, such as lowwages and long hours.The dawn of the new millennium will notchange the fact that Japan’s distributionbusiness is an essential part of the nationaleconomy. In the next century, Japan’spopulation will continue to age and itsbirth rate will continue to drop, two factorssuggesting no further expansion of theeconomy. The drive for environmentallyfriendly transportation systems willcertainly grow and with the advent of newinformation technologies, customers willhave even more reason to demandoptimum transportation services.If distributors and freight carriers are tomeet the challenges of this new business

million tonne-km (%)

Year Railways Motor Coastal Domestic Totalvehicles shipping airlines

1985 22,134 205,942 205,818 482 434,375

(5.1) (47.4) (47.4) (0.1) (100)

1990 27,287 274,244 244,546 799 546,876

(5.0) (50.1) (44.7) (0.1) (100)

1995 25,146 294,648 238,330 924 559,047

(4.5) (52.7) (42.6) (0.2) (100)

1998 22,959 300,670 226,980 985 551,594

(4.2) (54.5) (41.1) (0.2) (100)

NotesRailways: JR Freight and private railway companiesMotor vehicles: 1985 figures do not include light vehicles.

9Japan Railway & Transport Review 26 • February 2001Copyright © 2001 EJRCF. All rights reserved.

environment, they must work towardreformation and rationalization of theentire distribution system, and devise newstrategies to help them survive.

Overview of Rail Freightin Japan

JR Freight—Company profile andfinancial situationWhen JNR was privatized in April 1987,i t was spli t into six JR passengerrailways and one rail freight carrier, JRFreight. Each passenger railway servesa specific region, but JR Freight offersservices throughout Japan. This isbecause the policymakers felt that railfreight would be more efficient if onecompany had access to the entirenational railway network1.JR Freight is capitalized at ¥19 billion, andoperates on about 96,000 km of track thatcomprises the network covering most ofJapan. The track used for freight servicesis divided into 86 track sectors. JR Freighttransports freight in containers and intankers and hopper wagons for bulkyfreight, such as petroleum, cement, andpaper. The company is also trying toincrease its revenues in related sectors—for example, by letting space in its freightstations to companies that need shippingfacilities, storage space and sortingfacilities. It is also involved in operationof convenience stores and othercommercial business.The company’s corporate headquarters

are in Tokyo and there are six regionaloffices, seven branch offices and 34 salesbranch offices responsible for operations,business administration and salespromotion.Responsibility for freight operations isseparated between various entities inorder to provide efficient services, ensuresafety and offer on-time delivery. Freightstations serve as an operations base, eachof which has its own locomotive andfreight wagon depots, and rolling stockrepair shops, which are responsible forfreight train operations and inspection andrepair of locomotives, freight wagons and

containers. The operations base alsolocated near maintenance centres tomaintain and repair track, electricalequipment, cargo handling machinery,and other related equipment.The company has 323 freight stationslocated in urban centres throughout Japan;140 are container stations. There areabout 9500 employees. It operates 856locomotives and 17,582 freight wagons(of which 7726 are owned by othercompanies). It also has about 100,000containers at its disposal (of which about23,000 are owned privately).The company ’s predecessor (JNR)

Profile of JR Freight

Total revenue (¥100 million)* 1,644

Freight volume (10 million tonnes)* 3.95

Freight tonne-km (100 million)* 223

Transport density (tonne/day)* 6,376

Capital (¥100 million) 190

Total assets (¥100 million) 3,067

Length of line operated (km) 9,582

Freight stations 323

No. of trains (per day) 737

Train km (1000/day) 234

Employees 9,486

No. of locomotives 856

No. of freight wagons 9,862

Privately owned freight wagons 7,726

Containers 76,395

Privately owned containers 22,634

(1 April 2000)

*in fiscal 1999

JR Freight Revenues

Year 1987 1990 1995 1999

Containers 809 1,155 1,202 1,080

Wagon load 758 704 508 288

Total 1,568 1,860 1,711 1,369

(¥100 million)

Freight carried by JR Freight

Year 1985 1987 1990 1993 1995 1997 1999

Containers 1.22 1.38 2.02 1.96 2.06 2.25 2.05

Wagon load 5.64 4.15 3.82 3.35 3.09 2.48 1.90

Total 6.86 5.53 5.84 5.31 5.15 4.73 3.95

Containers 107 121 185 184 192 201 187

Wagon load 109 80 82 66 55 42 35

Total 216 201 267 250 247 243 223

Tonnes(10 million)

Tonne-km(100 million)




abandoned the marshalling yard systemon 1 February 1984, before the divisionand privatization, replacing it with a directtransport system linking transport bases.Containers are used mainly to transportconsumer commodities over medium tolong distances, whereas tankers andhoppers generally carry large bulk cargoesover comparatively short distances.An average of 737 freight trains operateeach day throughout the country. Ofthese, 425 are container trains, while theremainder are trains hauling bulky freightin tankers and hoppers. The total distancetravelled by these freight trains each dayis about 240,000 km (190,000 km bycontainer trains). About 90% of JRFreight’s rail freight is transported at night.Although JR Freight and the six JRs operateon the same track and catenary using thesame railway facilities, but they are allowned by the JRs. Although JR Freight

does not pay track usage fees, it isresponsible for the incurred incrementalcosts by operating freight trains on thesetracks.During the first few years after 1984, thecompany enjoyed rising demand thanksto Japan ’s ‘bubble economy ’ andoperating profits exceeded initialprojections. But when the economy fellinto recession in 1993, the JR Freightbalance sheet went into the red. Soonafter, Kobe was devastated by a majorearthquake in January 1995, pushing thecompany further into the red.In an attempt to achieve stable revenuesand adopt a low-cost structure, thecompany is now promoting restructuringbased on its New Freight 21 plan. Someunprofitable businesses have beenabandoned and attempts have been madeto boost efficiency levels. In the last 3years, the bottom line has been improved

by cutting the labour force by about 1800employees and by cutting costs by some¥31 billion. As a result, the company ispoised to return to the black this currentfiscal year.

Fluctuations in rail freightvolumesDuring the company’s first 6 years, itsfreight volumes increased steadily fuelledby the bubble economy. But tonnagestarted to fall as soon as the bubble burstin 1993. The main reasons were: (1)slumping demand during the recession;(2) a shift toward trucks, conventional andRo-Ro 2 ferries prompted by stiff pricecompetition; (3) greater efficiency indistribution as a whole through corporatemergers and restructuring; and (4) servicedisruptions caused by natural disasters.Containerized freight varies greatly withthe main types being agricultural produce,food, beverages (beer and juices), smallsorted items, electrical and electronicproducts, auto parts, books, apparel,pharmaceuticals, and chemical products.The annual volume exceeded 20 milliontonnes in fiscal 1991 and reached about20.51 million tonnes (18.7 billion tonne-km) in fiscal 1999.Container shipments comprise the majorshare (84%) of total freight and 78% ofall container freight is shipped more than500 km (915 km average distance).Clearly, containers play an important rolein transport of medium- and long-haulfreight. Much of this freight travels overtwo routes—the Tokaido and San’yo mainlines linking Tokyo, Osaka and Fukuoka,and the Tohoku and Hokkaido main lineslinking Tokyo, Sendai and Sapporo.Bulky freight in tankers and hoppers ismainly petroleum, cement, limestone andchemical products. These goods aregenerally destined for coastal industries,so JR Freight must compete with coastalshipping that can carry bulk cargo verycheaply. Competition with trucks is alsohard and the railway is losing business to

Rail Freight Volumes by Commodity (fiscal 1999)

Minerals (ore, etc.) 47Forestry products (lumber, etc.) 20Agricultural products (rice, vegetables, fruit, animal feeds, etc.) 219Chemical products (chemical fertilizers, pharmaceuticals, etc.) 375Machinery (equipment, parts, automotive parts, etc.) 110Foodstuff and other consumables (tobacco/cigarettes, beer, processed foods, etc.) 328Fibres (paper, chemical fibres, pulp) 323Other industrial products (electric/electronic products, books, cosmetics, etc.) 131Less than truck load (small freight, personal goods, postal freight, etc.) 188Others 310Subtotal 2,051Petroleum 1,001Limestone 66Cement 311Coal 30Chemicals 77Ore 21Paper and pulp 87Steel 2Lumber 17Others 290Subtotal 1,902Total 3,954

(10,000 tonnes)

Con

tain

ers

Bul

ky fr

eigh

t

Commodity Freight Volume


large trucks every year. In fiscal 1999,the railway’s tankers and hoppers carried19.02 million tonnes (3.5 billion tonne-km) a decline of more than 50% since1987. Tankers and hoppers are generallyused for hauls between the coast and theinterior and the average journey distanceis only 186 km.

JR Freight’s Attempts toImprove Services

JR Freight is modernizing its transportmethods in order to satisfy changingcustomer requirements and encourage a

Rail Freight Volume (fiscal 1999)

Class EF81 freight locomotive hauling gasoline tankers on Joban Line (Author)

4 3

(10,000 tonne/day)

2 1

Sapporo

Fukuoka

Osaka

Tokyo

Sendai




modal shift away from trucks. The marketfor distribution of small commoditiesalong high-density corridors will surelygrow and container rail transport is anefficient way to move these and othertypes of goods. The company isconvinced that placing more emphasis oncontainer transport will boost its revenues.However, a number of container-relatedproblems remain to be solved, includinginefficient transshipment at freightstations, and inflexible shipping times andcapacity. JR Freight is attempting to greatlyimprove these problems and slash costs.To encourage demand, rolling stock isbeing renewed, freight station equipmentis being upgraded, and services are beingtailored to shippers’ needs by: (1) runningcontainer trains at faster speeds; (2) boostingtransport capacity; (3) developing newlocomotives; (4) developing faster freightwagons; (5) developing various newcontainers; (6) upgrading freight stationfacilities; and (7) improving informationsystems.

Faster freight trainsSpeed is a priority throughout modernsociety. In the case of freight transport,speed can be increased by makinginfrastructure more efficient, and reducingdistribution lead times. On the otherhand, the delivery speed of consumeritems, which are often sorted anddelivered by door-to-door couriers, canbe increased by overnight transport withtrains departing late at night and parcelsdelivery early next morning.JNR container trains were limited to a topspeed of 95 km/h, but new locomotivesand freight wagons manufactured since1987 have boosted top speeds to 100 oreven 110 km/h. These faster speeds areseen mainly on trunk lines.Each day, an average of 183 fast, long-distance container trains shuttle betweenTokyo, Sapporo, Osaka, and Fukuoka. Ofthese, 44 run at top speeds of 100 km/hor more. The fastest train covers the

554 km between Tokyo and Osaka in6 hours and 38 minutes, departing Tokyoat 23:03 and arriving in Osaka at 05:41.The schedule speed of 84 km/h is possiblythe fastest in the world for a freight trainon narrow-gauge track.Standing times of container trains at freightstations are being cut, and the hours forreceiving and consigning container freightare being extended to offer customersbetter and more convenient services.

Boosting capacity and efficiencyEase of use depends partly on transportcapacity. Any company attempting toboost freight transport capacity mustconsider operating more and longer trains,boosting container loading and unloadingefficiency at freight stations, andincreasing the number of trucks used tocollect and deliver freight.Since its establishment, JR Freight hasrevised train schedules 11 times, and hasincreased daily runs of container trainsfrom 182 to 425. Of these 425 daily runs,183 are direct operations on trunk linesthrough two or more zones. As a result ofthese changes, the daily transport capacity

of container trains is now equivalent toabout 21,000 twelve-ft containers.Many of JR Freight’s container trains ontrunk lines depart at night. However, thecompany realizes that container traindeparture and arrival schedules should bebased on client-friendly distribution cycles,so it has adopted a policy of adding morefreight wagons to trains that operate in high-density time slots. In the past, one trainhad a maximum of 20 wagons (400 m),but a maximum of 25 or 26 is now possibledue to the introduction of more powerfullocomotives, improved freight stationfacilities, and upgraded electric powerequipment. Twenty-eight freight trains runeach day on the Tokaido and San’yo lineswhere demand is heaviest.The company also operates 312 bulkyfreight trains of tankers and hoppers. It iscutting costs by increasing the tonnage andreducing freight train hours. Generally,freight locomotives pull a maximum loadof 1200 tonnes in tankers and hoppers butintroduction of more powerful locomotivesin early 2000 raised the maximum load forgasoline to1400 tonnes.

High-performance Electric Locomotives

Class EF200 EH200 EH500 EF510

Power supply 1.5 kV dc 1.5 kV dc 1.5 kV dc 1.5 kV dc

20 kV ac 20 kV ac

Axle arrangement B0-B0-B0 (B0-B0)+(B0-B0) (B0-B0)+(B0-B0) B0-B0-B0

Length (mm) 19,400 25,000 25,000 19,800

Weight (tonne) 100.8 134.4 134.4 100.8

One-hour rating power (kW) 6,000 4,520 4,000 3,390

Starting tractive effort (kN) 350 460 420 330

Maximum speed (km/h) 110 110 110 110

First manufactured 1994 (scheduled for 2001) 2000 (scheduled for 2001)

Notes

Three-phase asynchronous traction motorPWM Inverter control(EF200: GTO thyristorEH200: IGBT thyristor)Electrically controlled air brakes (with dynamic braking)

Three-phase asynchronous traction motorPWM Voltage converter and inverter control (using IGBT thyristor)Electrically controlled air brakes (with dynamic braking)


Development of faster powerfullocomotivesMost JR Freight locomotives running ontrunk lines were built in the 1960s and theirage prevents operation at high speed overlong runs, or at high efficiency. After 1987,faster more powerful locomotives weredeveloped using new technologies. Theaim is to mothball the older locomotives,increase speed, and reduce maintenancecosts. The company is mass-producingclasses EF200 and EF210 (1.5 kV dc, 3400kW) electric locomotives for the Tokaidoand San’yo lines, Class EH500 (20 kV ac,50/60 Hz; 1.5 kV dc, 4000 kW) electriclocomotives for the Tohoku Line, and ClassDF200 (2650 kW) diesel-electriclocomotives for Hokkaido. Sixty-five ofthese new locomotives have already beenintroduced for high-speed container trains.All have inverter control systems and anAC asynchronous traction motor drivesystem that can haul 1300 tonnes at 110km/h. Their actual speed and traction meetthe design specifications for container trainsand they now form an important part ofthe JR Freight fleet. The company has alsobegun to manufacture a new type of DCelectric locomotive (Class EH200) witheight powered axles for use on steep-gradient lines as well as an AC/DC dual-system locomotives (Class EF510) with sixpowered axles for the Sea-of-Japan coastwhere there are heavy snowfalls in winter3.

Development of new freightwagons for high-speed trainsMany of JR Freight’s wagons were builtin the 1960s and inherited from JNR.Because of speed and load limitations,these old wagons were not able to meetthe demand for increased capacity, soJR Freight quickly developed newcontainer wagons. The mass-producedClass Koki 100 of container wagons cancarry 40.5 tonnes at maximum speedso f 110 km/h and have e l ec t ro -pneumatic controlled air brakes withvariable load control. The companyoperates more than 4300 of thesewagons and depends heavily on them.The Japanese government recently relaxed

regulations on import and export ofcontainer freight, and this has boosteddemand for transport of ISO 24-tonne tankcontainers. To meet this demand, thecompany has developed and is mass-producing the Koki 200 of containerwagons. Each wagon can carry two 24-tonne tank containers, for a total of 48tonnes.JR Freight is also conducting trial runs withKoki 72 low-floor container wagonscapable of carrying 48 tonnes on a floorheight of just 740 mm. When in fulloperation, all tracks will be able to carry40 ft/9 ft 6 in containers landed in Japanfrom abroad.Although JR Freight is still using the tanker

Class EF210 electric locomotive hauling high-speed container train on Tokaido Line(Author)

Class EH500 AC/DC dual-system locomotive (JR Freight)

New Container Wagons

Class Koki 106 Koki 200 Koki 72

Length (mm) 20,400 15,000 16,000

Dead weight (tonne) 18.9 16.9 17.2

Maximum payload (tonne) 40.7 48.0 48.0

Floor height (mm) 1,000 1,000 740

Maximum speed (km/h) 110 110 110

Bogies Two-axle bogies Two-axle bogies Two-axle bogies

First manufactured 1996 2000 1997

International marine containers 1CC x 1 1CC x 2 1CC x 21AA x 1 1AA x 1 1AAA x 1

JR Containers 12 ft x 5 20 ft x 2 12 ft x 320 ft x 3 30 ft x 1 20 ft x 230 ft x 2




and hopper wagons it inherited from JNR,the company has developed a high-performance Taki 1000 tanker wagon forcrude oil and gasoline. The new designtakes into account the need for greatercarrying capacity and higher speed. Itsfish-belly tank has larger dimensions toincrease the capacity to 45 tonnes. Thewagons have an improved braking systemand can operate at 95 km/h. They will beowned by private companies and JRFreight now operates 462 of them.

Development of differentcontainersContainer size and structure vary greatly,depending on the goods, the pallet type,and the loading and unloading method.Most JR containers are 12-ft long, althoughsome measure 20 or 30 ft. A 12-ftcontainer can carry 5 tonnes and wasdesigned to meet conditions unique toJapan where consignment lots are small,standard pallets measure 1100 mm oneach side, and conditions may require useof medium-sized fork-lifts.These small containers were used formany years by JNR. Recent types featurehigher doors on both sides to permit easyloading and unloading of pallets andgreater carrying capacity. The 30-ftcontainers for sorted items were firstintroduced 10 years ago and are about aslong as a large truck body size. They are

used on high-density corridors to transportfreight consignments by truckingcompanies. A total of 805 privatelyowned 30-ft containers are registered.The company also carries 20- and 40-ftcontainers from abroad, and also handles40 ft/9 ft 6 in high containers on its Sendai–Tokyo–Yokohama and Osaka–Kobe–Fukuoka routes.Dairy products, frozen foods and otherrefrigerated goods are carried in reefercontainers with a refrigeration unitmounted at one end. The temperature inthe container can be regulated toanywhere between -25°C and +25°C±0.1°C. A total of 1235 privately ownedfreezer containers measuring from 12 to31 ft are currently registered and in usethroughout Japan.A number of other containers have beendeveloped and introduced to suitindividual freight needs. These includecontainers with vents for air circulation,wing-roof containers, two-level containersfor motorcycles, roofless containers, andtank containers.

Upgrading freight stationfacilitiesJR Freight is investing heavily in measuresto boost carrying capacity, improve routesand upgrade freight station facilities.These measures, which are beingsubsidized by the national government,

will help improve the environment andbring socio-economic benefits.The heaviest rail freight volumes are on theTokyo–Osaka section of the Tokaido mainline but many sections of this line are nowoperating near maximum capacity, makingit difficult to run more freight trains in thecorridor. One solution is to run longer trainsand to meet this need, in 1993, JR Freightbegan upgrading the capacity of substationsand lengthening freight station sidings.After completing this work in 1998, thecompany introduced new 26-wagon trains.It plans to introduce more in the future.The old Kita Kyushu marshalling yard isnow being converted into a moderncontainer station. When this ambitiousproject is completed in 2002, JR Freightwill be able to run more freight trains andreduce times between the Tokyo area andKyushu. Container freight stations are alsobeing developed in other parts of thecountry. Under the old system still usedat most freight stations, container trainsare switched to an out-of-the-way sidingfor loading and unloading. But under thenew Effective and Speedy ContainerHandling System (E&S) method, containertrains switch directly to a convenientsubsidiary main track, stop for unloadingand loading at a dedicated platform, andthen depart as soon as loading iscompleted. Unloading and loading arefaster, reducing standing time and

Koki 200 container wagon with two ISO 24-tonne tank containers (JR Freight) Loading 40-ft international maritime container on Koki 106 container wagon(JR Freight)


allowing more container trains to stop atthe platform. This E&S method is nowused at 18 freight stations in Japan.

Computerized rail freightservicesJR Freight has introduced two efficientcomputer systems to improve its freightservices: FRENS (FREight informationNetwork System), supporting containertransport, and NETS (NEtwork ofTransportation and Strategy), supportingtransport of bulky freight in tanker andhopper wagons. Both systems have beeninstalled in about 700 computers in salesbranch offices, freight stations andforwarding-agent offices, facilitatingonline access to and management oftransport including:• Container train reservations• Current location and circumstances of

containers• Freight train arrival forecasts• Information on container contents• Information on freight forwarding

companies• Other detailed information

In other words, the two systems improvethe management of container and bulkcargo transport, and customer services.The systems are linked via the Internet toinformation systems used by containerfreight forwarders and delivery companiesto provide comprehensive and effectivetransport management.The 1995 Kobe earthquake also promptedmeasures to strengthen the ability ofrailways to respond more rapidly tonatural disasters. In 1996, JR Freightbegan installing a Global PositioningSatellite (GPS) system on the Tokaido andSan’yo lines to verify the position andcircumstances of freight trains whenservice is disrupted, and to facilitatecommunications between rail trafficcontrollers and train engineers. Thesystem is also very useful when it isnecessary to make schedule changes orestablish a substitute transport plan afteran incident. Train information is relayedto traffic control centres and to FRENScomputer terminals, making it possible togive customers more accurate informationon the whereabouts and condition of theirfreight. The company is presently

installing GPS-based technology on threeother important routes in the Hokkaido,Tohoku and Niigata regions.In spring 2000, a system was installed toread container numbers automatically at47 major freight stations. In the past,container and freight car numbers wererecorded manually, but now wireless tagsare attached to each container and wagonand data from these tags is input to FRENSterminals. This system saves labour andprovides more accurate and fasterinformation on containers.A system is also being installed to monitorfreight wagon inspections and repairs inorder to permit centralized and uniformcontrol over inspection data, therebyensuring better transport efficiency. Dataon previous inspections can be used toimprove parts management and compileoptimum inspection schedules. Thesystem also faci l i ta tes access toinformation on rolling stock. Anotheradvantage is that this data can be linkedto freight wagon tracking data from theFRENS system. This helps quick locationof problems, permits coordinatedscheduling of operation planning andinspection, and facilitates dispatch offreight wagons. The company ispromoting this new system as a way toprovide more dependable services, makeoperations more efficient, and reducemaintenance costs.JR Freight has also started a system tomonitor locomotive inspections andrepairs in order to ensure company-wideuniform control and management for thepurpose of preventing breakdowns andreducing repair costs.Other systems to monitor maintenance ofelectrical equipment, tracks, machineryand other infrastructure have beenintroduced to reduce costs.

Development of new intermodalsystemsIn 1986, JR Freight launched piggybackservices for small trucks of up to 8 tonnesTokyo Freight Terminal at Tokyo Bay (JR Freight)




gross weight and by 1993, an average of396 trucks were being carried each dayacross 13 sectors. However, the servicewas abandoned in spring 2000 becauseit was becoming too unprofitable for thefollowing reasons: (1) the shortage oftruck drivers eased; (2) large trucks couldnot be piggybacked because of loadingrestrictions; and (3) loading procedureswere inefficient.However, the company has beencarrying swap bodies between Tokyoand Fukuoka since 1999. Swap bodytransport means carrying large truckbodies (without cab) on freight wagons.The purpose is to encourage a modalshift from road to rail. This type ofintermodal sys tem has spread inEurope, but has been modified in Japanto meet unique conditions where bodylength is limited to 30 ft, volume to51 m3, and weight to 12.5 tonnes.Swap bodies are lighter than containers,offer easy loading, and tend to keeptheir contents stable. The companyintends to promote these advantagesand encourage greater use of theintermodal swap body method.

Future Challenges

In the 21st century, Japan’s distributionbusiness will see a decline in freightvolumes and an increase in demands forbetter service and more efficient transport.These demands will be prompted byadoption of third-party logistics and SCM,and use of advanced informationtechnologies.During this century, Japan must address anumber of difficult challenges, includingtraffic congestion, atmospheric pollutionand other environmental problems,dwindling energy resources, a labourshortage brought on by a falling birthrate,and an aging population. Some can bealleviated through a modal transport shiftin high-density corridors, and transportpolicies have been promoting this shift forsome time.In light of the above, JR Freight believesthat rail freight will probably play animportant role in transportation of goodsin high-density corridors in the future.The short-term strategy is to develop intoa rail freight company that offers the best

services for minimum cost. This strategyenvisages JR Freight as an efficient carrierproviding high-quality rail services inhigh-density corridors and working incloser coordination with truckingcompanies that deliver door-to-door.The medium-term strategy is to evolve intoa logistics rail freight system withcomprehensive distribution capabilities.This can be done through affiliations withtrucking and marine shipping interestsusing network information systems, butfour conditions must be met:• Provide excellent rail freight services

meeting SCM principles.• Improve customer services and

promote up-to-the-minute salesactivities, taking advantage ofnetworking technologies.

• Develop competitive rail freightsystem.

• Provide low-cost transport services.

Rail freight services meeting SCMprinciplesManufacturing industries are rapidlytaking the lead in introduction of SCMprinciples. JR Freight intends toestablish information systems that meetthese principles with the goal of beingable to rapidly develop optimum railt r a n s p o r t s c h e d u l e s t h a t m e e tcustomers ’ daily requirements forcontainer shipments. To achieve thisgoa l , the company mus t use aninformation system that will help it topredict how many different types ofcontainers and how many deliverytrucks will be needed during individualtime slots at each station, and to predictwhen goods will arrive. Such a systemwould ensure accurate and efficientcontainer handling decisions. Thesystem must also provide accurate dataon location of containers, which meansestablishing another information systemlinked via the Internet to customers’distr ibution information systems,permitting online container tracking.Loading Swap Body at Tokyo Freight Terminal (JR Freight)


SCM requires short distribution cycle leadtimes, meaning further cuts in timesbetween major cities. Therefore, JRFreight plans to introduce super-expresscargo trains travelling at schedule speedsof at least 90 km/h in the high-densitycorridor between Tokyo and Osaka, andto raise the schedule speed of containertrains to 80 km/h between other majorcities. The company is continuing R&Dinto high-speed freight trains in order toincrease locomotive and freight wagonspeeds further.

Improving customer services andboosting sales potentialTo fur ther improve services anddistribution efficiency, the FRENS systemshould be fine-tuned to permit JR Freightto coordinate online, real-time processingof a wide variety of information using theInternet and electronic data interchange(EDI) systems with customers.As the information revolution continuesto make strides in tandem with theInternet, more-and-more companieswill conduct online commerce withcustomers. Rail freight companiesshould also use email to determinecustomers’ needs, expand their marketand develop new customer-friendlyservices. A homepage and emailcommunications with customers wouldmake it easier to answer enquiriesabout the locat ion of a speci f iccontainer, expected arrival time, etc.,e spec i a l l y when s chedu le s a r edisrupted.JR Freight intends to develop businesssupport sys tems that wi l l permitprocessing of a wider variety of sales-promotion information, includingcustomer profiles, previous customershipments and business, complaints,inquiries, marketing information, andinformation on products and services.This would facil i tate prompt andefficient sales activities, and raisecustomer confidence.

Developing competitive railfreight systemOver the last few years, deregulationhas facilitated the development oftrucking and coastal shipping interests,encouraging use of large trucks, semi-trailers and high-speed ferries. Trucksand ships have become more efficientin mov ing goods , and a re nowt r an spo r t i ng l a rge r vo lumes o fcommodities over longer distances tothe detriment of rail freight.To reverse this trend, JR Freight mustdevelop an advanced rail containersystem. With this in mind, the companyis presently studying a wide range ofissues, including container loads andvolumes, specifications for containertrains, transportation networks, transportscheduling, collection, delivery andinformation systems.

Cost reductions for customersand companyThe two factors considered first byevery customer are service quality andprice. Customer demands may change,but pr ice wi l l a lways remain animportant factor. This means that JRF r e i g h t m u s t a d o p t l o w - c o s ttransportation methods. Tomorrow’srailways will be able to cut costs partlyt h r o u g h u s e o f i n f o r m a t i o ntechnologies.The first step is to develop informationsystems that will permit the efficient useof locomotives, freight wagons andother railway resources. If the companyuses each locomotive and freight car

efficiently, and knows the location ofeach unit, it can cut costs by allocatingrolling stock in the optimum manner.T h e s a m e t y p e o f i n f o r m a t i o nprocessing systems can be used toassign containers and trucks servingfreight stations. This will greatly cutcosts for all operations, including cargocollection and delivery.The next step is to re-engineer freightstation operations by introducingsuppor t sys tems . An au tomat iccontainer number reading system hasalready been introduced and thecompany intends to develop otherinformat ion sys tems to ra ise thee f f i c iency o f a l l f r e igh t s t a t ionoperations and cut labour costs. Someof these systems will support containerloading and unloading, container relayoperations, freight wagon allocation,and ledger entries. �

Notes1. JR Freight is not the only rail freight carrier in

Japan. Another 11 private rail freight companies

serve ports, and eight private railways carry

cement, limestone, coal and other commodities.

These 19 companies transport about 20 million

tonnes of freight each year.

2. Ro-Ro means roll-on roll-off ferries in which

trucks drive on at one end and drive off at

the other.

3. In Japan, the maximum axle load is 17 tonnes to

prevent excess load on tracks and other

infrastructure. This is why freight locomotives

have six to eight powered axles.

Katsuji Iwasa

Mr Iwasa is a Senior Executive Director and Director General of Logistics Headquarters of JR Freight.

He joined JNR in 1962 after graduating in mechanical engineering from Keio University and was

appointed Safety Manager in the Train Operation Department in 1985. He became Technical Director

of JR Freight in 1987 where he was also Executive Director of the Tokai Regional Office in 1990. He

was appointed CEO and President of Fukushima Coastal Railway in 1995 before assuming his present

post at JR Freight in 1999.

Documents

Rail Freight in Japan—The Situation Today and Challenges ... · PDF filecontainer trains). About 90% of JR Freight’s rail freight is transported at night. Although JR Freight and