Home delivery firms strain under e-commerce load

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Staff Writer

Amanda used to work part-time for major delivery firm Yamato Transport Co., helping out during Japan’s busy traditional gift-sending seasons in summer and winter.

But not anymore.

“It was just too hard,” she said.

“Drivers are not robots. They are human beings. But people don’t understand,” the naturalized Japanese in her 30s told The Japan Times. “You’ll never understand how hard it is unless you actually work for them.”

Amanda, not her real name, is one of the overwhelmed Yamato drivers struggling to deliver a growing mountain of parcels fed by online shopping, a market that expanded about 1.8 times from 2010 to 2015.

According to transport ministry statistics, a record 3.87 billion parcels were delivered in 2016, up about 32 percent from a decade ago.

More than 90 percent of the parcel deliveries in fiscal 2015 were made by three firms: Yamato, Sagawa Express Co. and Japan Post Co., according to the ministry.

Amanda said the last time she worked for Yamato was in winter 2015.

As a part-time assistant to a full-time driver, Amanda had the choice of working a morning-to-afternoon shift or a night shift. She usually ended up doing both.

“I often worked until late at night, even when I was slotted in the morning shift,” she said.

The delivery list was always long — sometimes 300 or more a day — forcing the pair to criss-cross their designated area nonstop. Unable to take lunch, they often had to settle for a quick, light meal while driving.

Even slight delays in delivery would draw a storm of complaints from customers, but they also had to be accurate to avoid being lambasted by their bosses, she said.

What bothered Amanda the most was visiting the same place over and over only to find the recipient absent. Redelivery is free but increases the burden on drivers, she said, bringing up one of the industry’s biggest problems.

For example, one day she had to carry heavy parcels filled with oranges and rice to the upper floor of an apartment building three times via the stairs because there was no elevator and the occupants weren’t home (drivers usually don’t call ahead). On another day, she found herself hefting a 30-kg bag of rice.

Some recipients weren’t home even though they asked that a parcel be delivered within a certain hour. Others refused to open the door even though they were obviously home, she said. Still, she had to visit them at least twice a day and leave a delivery notice.

Although Yamato constantly recruits part-time help, the company was always short-handed because there were few applicants, Amanda said.

“Drivers still ask me if I can come to work. They say they desperately need help or they will die from overwork,” she said.

“Yamato’s service is convenient for customers, but sometimes it’s too much,” she said. “People are taking its generous service for granted.”

The burden on delivery drivers has since become a social issue.

To raise awareness, the Environment Ministry launched a campaign in March involving more than 100 companies and organizations to show how incomplete deliveries hurt society.

According to a 2015 transport ministry report, an estimated 20 percent of all parcels have to be redelivered each year, causing roughly 420,000 tons of carbon dioxide emissions and 180 million wasted man-hours — the equivalent of the labor performed by 90,000 truck drivers a year, it said.

Reflecting the redelivery and labor hardships, Yamato Holding Co. recently reported that group revenue rose 3.1 percent in the April-December period compared with the same period a year ago but caused operating profit to drop 6.5 percent.

To improve the situation, Yamato, the leading delivery firm for Amazon Japan G.K., is reportedly considering pulling out of the e-commerce giant’s same-day delivery service.

It may also partially terminate contracts with major clients who refuse to accept higher shipping fees and defer some deliveries during peak periods, according to Kyodo News. Yamato declined to comment for this article.

Meanwhile, Yamato announced on Thursday that it will raise its base shipping fees for the first time in 27 years and said it will abandon the noon to 2 p.m. delivery slot to make it easier for drivers to take lunch.

It will also widen the 8 p.m. to 9 p.m. delivery slot to 7 p.m. to 9 p.m. to ease the concentration of delivery requests during peak nighttime hours.

To help drivers further, the company reached an agreement with its labor union last month to raise their salaries.

Another parcel giant, Sagawa Express, which withdrew from its contract with Amazon Japan G.K. in 2013, refused to comment for this story. But media reports say Sagawa stopped doing business with Amazon because the hurdles posed by delivering its products, including the new same-day service, were too much to handle.

Meanwhile, Japan Post announced earlier this month that it will team up with e-commerce giant Rakuten Inc. and start a new service to reward customers who excel at first deliveries with “points” that can be used toward future purchases online.

It also plans to let customers tell drivers where they want their packages left — such as at the front door — if they are absent to “reduce redelivery as much as possible,” said Hideo Murata, a senior spokesman for Japan Post.

“We currently charge fees only for the first delivery. But going for redelivery involves a significant cost for us,” he said. “We need to reduce that cost, so we can put more resources into improving our service.”

But there are still many hurdles to overcome to make the plan work, Murata said, including how to ensure parcels won’t be damaged or stolen. Another issue, he said, is whether leaving packages at the front door will be accepted by customers in a country where door-to-door delivery is a long-held custom, he added.

Murata said he is in a dilemma over the parcel industry’s current situation and has mixed feelings about asking customers to pay for these growing burdens.

“We are the ones who started offering such services as free redelivery and late-night deliveries upon request, without giving much consideration to the burdens they would cause,” he said. “I’m not sure if it’s right to change them all at once so easily.”

Despite efforts by some firms to curtail the burdens, the fundamental problem lies in a common misperception that delivering parcels involves no costs, said Yuji Yano, a professor of logistics for Ryutsu Keizai University in Chiba Prefecture.

“Even though online shopping websites say customers don’t have to pay the shipping fee, in reality the cost is borne by e-commerce companies. They are just using a misleading expression,” he said.

“Recipients aren’t aware of the delivery costs because they don’t have to pay it by themselves. And that lack of understanding causes unreasonable requests.”