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(1) Deregulation in Trucking Businesses
(A) Outline of deregulation
The Trucking Business Law (enforced on December 1, 1990) abolished the supply-demand
control regulation and changed the licensing system to a permission system for
new entrants. With regard to freight charges and rates, the approval system
was replaced by a notification system. Thus, economic regulations for this industry
were substantially eased. On the other hand, social regulations were strengthened
to ensure transport safety.
(B) Effects of deregulation
(a) Market vitalization
After the law was enforced, the number of newly participated operators increased
(Fig. 1).
Because of intensified competition, both the actual operating rate and the
actual carriage rate have been on the decline, and the tonnage per operating
truck also decreased. As a result, transport efficiency is declining (Fig.
2).
With the progress of deregulation, however, we can see vitalization in the
market, such as expansion of mixed freight transport.
(b) Decline in actual carriage charges
Operating revenue per tonnage-kilometer and other revenues decreased, and
actual carriage charges continue to decline (Fig.
3).
(c) Improved productivity
The number of employees increased, but the increase was lower than the rate
of increase in the volume of freight traffic. The added value per employee also
increased (Fig. 4).
(d) Diversified services
New parcel services are now provided because of intensified competition
among operators, such as "refrigerated" home delivery and specified-time home
delivery.
In addition new moving services have also appeared, such as moving packages
for transferees leaving their families behind.
(2) Deregulation in Aviation Businesses
(A) Outline of deregulation
Double-tracking and triple-tracking were introduced to more domestic lines.
Airline companies introduced advanced purchase discount prices for domestic
lines from May 1995, and implemented a fare range system between May and June
1996.
(B) Effects of deregulation
(a) Increased passengers
Of the twenty-four air routes which were changed to double-tracking or triple-tracking
from April 1991 to April 1996, sixteen routes saw a higher rate of increase
in actual passengers during the year following the change, than the average
rate of increase during the previous three years.
(b) Diversified fares and decline in real fares
The introduction of early purchase discount fares and fare range systems
resulted in changes in fares depending on seasonality, flight time, and purchase
time. Thus, the diversification of fares was accelerated.
Revenues from fares per passenger-kilometer continued to decline after FY
1992 (Fig. 5).
(c) Improved convenience through increased number of flights
As more airline companies extended their services thanks to double-tracking
and triple-tracking, the number of flights increased, resulting in improved
convenience to users.
(d) Improved productivity
Operating expenditures per available tonnage-kilometer have been on the
decline since FY 1991. Volume of passenger traffic per employee is on the increase
(Fig. 6).
In response to intensified competition, airline companies began to cancel
or reduce flights on unprofitable routes, while increasing the number of flights
on competitive routes.
(e) Balanced demand
Airline companies tried to balance demand and raise transport efficiency
by changing fares according to season and time zone.
In 1996, following the introduction of a fare range system, a large portion
of demand shifted from August, when fares are higher because of the large numbers
of passengers, to July and September (Fig.
7).
(3) Deregulation in the Taxi Industry
(A) Outline of deregulation
With regard to the number of vehicles, which is used to control supply and
demand, the following two measures were implemented in order to facilitate new
entries into the market :
1) A fixed percentage was added to the total number of vehicles in each area,
and
2) The minimum number of vehicles companies are required to own was reduced.
With regard to fares and pricing, a zone-tariff system was introduced, for
which different ceiling rates are to be calculated for each zone on the basis
of the average cost method. In addition, a shortening of the distance used to
calculate the initial fare was also a p proved.
(B) Effects of deregulation
(a) A more diversified fare system
By the end of March of 1997, 35 out of 77 pricing blocks across the nation
put multiple pricing systems into effect. Also, various services such as discount
rates have been introduced.
With the introduction of the zone-tariff system, there is now a larger variety
of fares and pricing systems available.
(b) Stimulating the industry with the introduction of more flexible supply-demand
control
The control standard has become more flexible since FY 1997. For example,
an announcement was made, increasing the limit on the total number of vehicles
in the Tokyo area by as much as 3,000, while the minimun number of vehicles
each company is required to own was reduced. This increase in flexibility is
expected to attract new entrants into the market for the first time in 33 years.
(4) Other Deregulation
(A) Review of regulations--for reducing physical distribution costs
(a) With regard to entry regulations on truck terminals, the licensing system
was changed to a permission system, and the regulations on charges and others
were substantially eased.
(b) For railway freight charges, the Ministry introduced an upper limit price
regulation based on full-cost principles from February 1997.
(c) The Cabinet meeting decided to phase out over tonnage adjustments in the
coastal shipping business. With the revision of the Coastal Shipping Association
Law , the Coastal shipping Association was able to underwrite the ship building
debts from June 1997.
Substantial portions of the Agreement on Coastal shipping Rate were abolished
by the end of November 1996.
(B) Review of regulations--for improving passenger transport services
(a) Easier entry to businesses
With regard to the supply-demand control standards for chartered bus businesses,
measures were taken from FY 1997 for approving the increase of vehicles in business
zones whose actual operation rate was higher than a certain level.
(b) Flexible setting of fares and charges
Deregulation of railway and bus fares/charges has enabled companies to adjust
fares and charges flexibly according to demand. For example, they introduced
discounts for bus to subway connections, a commuter pass valid only during the
summer vacation, off-season discount domestic passenger ship fares, and the
reduction in some express train fares and green car fares.
For passenger railway services, an upper limit price regulation was introduced
based on full-cost principles from January 1997, resulting in reduced fares
on parallel routes.
(C) Review of regulations --for improving quality of life
(a) Road Vehicles Act was revised, which simplified the inspection and maintenance
system from July 1995. In addition to the increase in "User Inspections", maintenance
services are being diversified and the basic rates for vehicle maintenance are
declining (Fig. 8).
(b) Online systems installed at convenience stores and other stores enabled
the sale of "agent-organized tours" and other items from June 1997.
(1) Trunk Line Traffic
(A) Trunk railways
The Yamagata Shinkansen Line, which offers through operation between Tokyo
and Yamagata, shortened the time needed to travel between the two cities by
42 minutes, and also eliminated the inconvenience of changing trains at Fukushima.
The number of passengers increased about 40% after the new line was opened.
On the other hand, the number of air passengers decreased between Tokyo
and Yamagata, but the total number of people moving between the two places increased.
This means that the traffic network has been improved enabling users to utilize
the advantages of both aviation and railway services (Table
9).
(B) Domestic aviation services
With regard to the offshore development activities at Tokyo International
Airport (Haneda Airport), the new runway C was opened in March 1997. This runway
increased capacity by 40 flights per day. As a result, some companies are trying
to establish new regular air transport businesses.
Based on the report by the Committee for the Slot Allocation of Tokyo International
Airport, forty flights were distributed among operators, resulting in increased
services. It also became possible to operate flights around the clock, including
midnight and early morning flights.
The extension of railway lines into airports provided users with easier
access at many airports. For example, at Fukuoka Airport, nearly half of the
airport users began to use the railway after the subway line was extended into
the airport (Fig. 10).
Note : User Inspection is a type of motor vehicle inspection in which motor vehicle users take their own vehicles to Local Land Transport Offices for inspection without utilizing of service garages.
(C) High-speed bus
With the progress of expressway construction, high-speed bus networks are
being enhanced. In Kyushu, for example, the completion of the Kyushu Expressway
shortened driving time and increased passengers. In addition, intensified competition
among different means of transportation led to increased speed, as well as the
introduction of reduced fares and freight rates for buses, railways and airplanes.
(2) Metropolitan Transportation
On the Isezaki line of the Tobu Railway, for example, the line between Takenotsuka
and Koshigaya was changed to a four-track line, and major improvement work was
completed at Kitasenju station, resulting in better services : more trains running,
relieved congestion, and trains running faster during the morning rush hours.
(3) International Transportation
(A) Construction of airports
At Kansai International Airport, the number of users has increased since
its opening, and new routes and flights have successively been added.
The number of foreigners who use Kansai International Airport increased
substantial-ly (Fig. 11), and an
increasing number of residents in the Kinki district departed Japan via this
airport.
Freight traffic in the Kansai district also increased considerably, in terms
of both quantity and share (Fig. 12).
(B) Construction of ports and harbors
As more and more large-sized container ships are plying between Asia and
Europe/ North America, the two berth of the container terminal with the depth
of 15 meters was opened at Kobe port in April 1996. At present, harbor facilities
are also being urgently constructed at the gate-way ports, such as Tokyo and
Yokohama.
At subsidiary gate-way ports in eight districts throughout Japan, international
container terminals are also strategically being constructed to help businesses
reduce physical distribution costs.
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