Yasunori Fujikura knows the nuts and bolts of the trucking business — as well as the pain of being behind the wheel in these tough times.
Deregulation has opened the already fiercely competitive transportation industry up to new entrants, driving out many traditional family-owned trucking businesses.
In addition, deflation has seen courier service fares slashed to nearly half the bubble economy levels of the 1980s.
Having taken the reins of a small trucking firm in Adachi Ward, Tokyo, from his father nine years ago, the 36-year-old Fujikura is no stranger to this grim environment.
“Fares have dropped to levels seen 20 years ago,” Fujikura said. “If they go any lower, I will have no choice but to fold my business.”
Aside from a few big names, almost all of the nation’s 58,000 trucking businesses are like his, employing 20 drivers or less.
Fujikura’s desire to save his and other small businesses led to the establishment in March 2002 of TraBox Inc., one of the first Web portals serving as online matchmakers for truckers and corporate users of courier services.
Coinciding with the nation’s Internet craze, the firm’s birth spawned dozens of copycats. Four years later, TraBox is one of the few that have survived the test of time.
Today, an estimated 100,000 drivers from 3,500 member firms use its services.
For a monthly fee of 3,900 yen, member truckers can click on TraBox’s site and access real-time inquiries by truckers and clients, with phone numbers, shipping destinations and prices offered or asked. They can also receive this information via their mobile phones, making timely deals possible.
Between 200 and 400 transactions are made via the firm’s Web site daily, and TraBox’s annual revenue has grown steadily.
It forecasts sales of 100 million yen for the current business year, a 49 percent rise from the previous year.
Fujikura attributes the company’s success to its large membership and the fact that, unlike many of its now-defunct rivals, it makes all delivery offers and requests public on the Web.
He likens the trucking business to handling “perishables,” as packages arrive at short notice and must be delivered immediately.
Also, filling trucks with cargo both going to and coming from a location is a task the whole industry must tackle amid today’s harsh business environment. Yet trucks are often empty on the return route because they are not matched up with timely delivery requests.
Toshihiro Atsumi, a transportation industry researcher at Mitsubishi Research Institute, said IT-aided logistics hold the key to survival for small and midsize trucking firms, many of which are cash-strapped and suffer from flagging sales.
“To secure revenue, smaller trucking firms need to reduce the number of trips made with no cargo,” Atsumi said. “Networking that uses information technology is a good way to achieve that.”
The disclosure of fares, however, is controversial. Fujikura admits some truckers complain that this strategy has driven market fares down.
Traditionally, the industry has been organized into a multilayered subcontracting network with fat margins enjoyed at each tier of the pyramid. Small firms that lack their own customer networks often get contracts from bigger trucking companies, which work for even larger trucking groups.
By hooking end-users directly with the smallest trucking firms, TraBox has helped expose the actual rates at which these small firms are undertaking deliveries to users, which now take the lower fares for granted.
But Fujikura remains undaunted. He even plans to release a daily “index” on transportation fares for the most commonly used routes, such as Tokyo to Osaka, much like stock market indexes.
“By making market prices open to everyone, truckers can fend off further pressure to accept lower fares,” he argued.
And he has numbers to back up his claim. According to Fujikura, bid and ask prices posted at TraBox during the busy preholiday season in mid-December showed transportation fares soared by some 20 percent.