CHAPTER 3. AIMING TO ATTAIN SMOOTH CARGO DISTRIBUTION


Section 1. Social changes affecting product distribution and the need to develop efficient physical distribution methods


    As a result of changes in industrial structure, diversification of people's needs, and rising living standards, improvements in transportation services related to physical distribution are becoming essential. However, obstacles to improvement of physical distribution, such as road congestion, environmental problems, and labor shortages, are increasing.
    It is important, for sound development of the Japanese economy and for improvement of people's standard of living, to overcome such obstructions and ensure smooth distribution.


Section 2. Acceleration of shifts among modes of transportation


    Truck transportation has come to make up more than half of the total volume of domestic freight traffic in tonnage-kilometers. This increase is attributed to the excellent mobility and convenience of trucks. However, such obstacles as road congestion, environmental concerns, and labor shortages are too great to allow us to expect to see continuing increases in truck transportation. Under the circumstances, it is deemed a major policy priority to assess the excessive reliance on truck transport and to promote a shift from trucks to railways or maritime transport, which are more efficient.
    In order to assure a smooth transition, a finance system within the Japan Development Bank was created in 1993 to consolidate intermodal transportation equipment and related information systems, and a "modal shift conference" was started in May 1993 to examine the measures to enhance the shift.
    To augment the capacity of railways and maritime transportation to which transport demand is to be shifted, measures are being developed to provide interest-free financing to railways through the Railway Development Fund for construction and improvement of facilities, and to make the coastwise shipping vessel volume adjustment system more flexible. Additional measure with increase of quotas of the Maritime Credit Corp.'s business activity, and increase of the rate of co-ownership of the Maritime Credit Corp., so as to enhance construction of roll-on, roll-off vessels, ferry vessels designed to cover long distances, and container vessels designed for transportation of small cargo such as container cargo or general merchandise.


Section 3. Promotion of consolidated cargo transportation


    Most inner-city and aerial cargo transportation relies on truck transport. Particularly common is the use of private trucks, which have no capacity to transport consolidated cargo from different consignees different from commercial trucks. Most such operations are one-way only, and as a result, efficiency is unavoidably low. These issues are considered to decrease efficient distribution.
    In response to such problems, the Ministry of Transport has been promoting a measure to shift transportation from private trucks to commercial trucks carrying consolidated cargos through the construction of cooperative distribution centers. In addition, a survey was conducted in FY1993 for the purpose of creating "Guidelines for Smooth Physical Distribution in Commercial/Business Integrated Areas."
    In October 1992, an Ordinance to Accelerate Improvements in Efficiency Distribution Business of Small and Medium Companies was implemented to support small and medium-size companies whose progress in improving distribution efficiency was unsatisfactory, due to fundamental weaknesses in their business. This ordinance is expected to enhance the efficiency of cargo transportation through the application of tax preference schemes to enhance business for small- and medium-distribution companies.
    The Ministry also announced a plan to modernize small and medium-size truck transport businesses and lead them to make structural improvements based on the plan.


Section 4. Construction of physical distribution centers


    In response to recent trends towards increased and diversified needs for product distribution, it is necessary to construct distribution centers which provide comprehensive functions, such as processing for distribution and a high level of information-processing functions, in addition to simply warehousing and sorting. The Ministry of Transport has been supporting such construction by supplying interest-free financing to NTT, special tax treatment and a Financial Investment Fund. The Ministry also implemented, in November 1993, a Revised Ordinance on Construction of Distribution Business Towns, aimed at accelerating the construction of distribution areas.
    The recent increase in cargo imports, attributed to changes in industrial structure and progressing international horizontal specialization of industrial activities, is causing congestion of cargo handling facilities at ports and airports. It appears that construction to augment the capacity of such facilities is necessary.
    The Ministry of Transport is planning to improve port facilities through construction of container terminals and large-scale, multi-purpose terminals to handle international cargo, and comprehensive terminals to handle imported cargo, based on the "8th Five-Year Plan for Port Improvement." For airports, the Ministry is planning the construction and expansion of capacity of cargo-handling facilities at New Tokyo International Airport and Kansai International Airport based on the "6th Five-Year Plan for Airport Improvement."
    In addition to these measures, the Ministry approved projects in six areas under the "Extraordinary Ordinance for Acceleration of Imports and Smooth Domestic Investment" implemented in July 1992, and provision of "Import Acceleration Areas" is to be pursued forthwith in various areas.


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