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6.22.2017

Amazon Japan Enlisting 10,000 Private Couriers in Tokyo for Own Delivery Network

The Nikkei published on 22 June 2017 that it has learned that amazon Japan has enlisted 10,000 private couriers to create its own delivery network in response to Yamato's pulling away from amazon business. 

According to the Nikkei report, amazon Japan is aiming to secure 10,000 private couriers in the Tokyo Metropolitan area alone by 2020. Their focus is on private couriers who specialize in same day deliveries. This is in response to No.1 private courier Yamato Transport Co., Ltd. pulling out of the service, leaving amazon to switch to Plan B. This move by amazon is anticipated to be welcomed by the private couriers that are used to absorb overflow by such major players as Yamato and rival Sagawa during peak times, as it would boost their overall volumes and hopefully, provide steady work throughout the year. 

The Nikkei estimates that amazon ships approximately 300 million parcels per year. This is the equivalent to just under 10% of overall domestic small parcels delivery volumes in Japan. If amazon starts to spread more volume to small and medium sized couriers, this would help towards leveling the playing field for e-commerce deliveries, which, to date, is a stronghold for the big three: Yamato, Sagawa, and Japan Post. 
In Tokyo, by far the largest destination, Maruwa Unyu Kikan Co., Ltd.,  a delivery company offering "Momotaro Bin" services predominantly for online supermarkets and is listed on the 1st Section of the Tokyo Stock Exchange, has brought together private couriers. Maruwa has already commenced services within the 23 wards as the contracted delivery agent for same day deliveries for amazon.
Maruwa's objective is to keep a close eye on the working hours of the drivers while guaranteeing a steady volume and thus income for them. Maruwa plans to offer dormitories, fuel subsidies, as well as training. Where necessary, Maruwa is also prepared to lease light-weight vehicles that are easier to maneuver through the central business district to encourage newcomers into the business. 
Maruwa has already prepared several hundreds of light-weight vehicles for the job. The plan is to expand to 1,000 vehicles within this year and to secure 1,000 and more drivers. By 2020, the objective is to expand to 10,000 vehicles and 10,000 drivers so that same day delivery service can be realized in the major neighboring cities to Tokyo. Depots will be added to its network and the overall investment is estimated to exceed 10 billion yen, funded by Maruwa's own money. 
According to the Ministry of Health, Labour, and Welfare, in 2016, there were 2.01 job openings for every driver for delivery service drivers including truck drivers. This is much higher than the national average of 1.25 jobs per applicant, clearly indicating that it is a seller's market lacking resources. The reason is that the job is tough while the pay is light. 
Delivery services by light-weight vehicle requires owners to register their vehicle with the Ministry of Land, Infrastructure, Transport, and Tourism, and the business can be launched with just one vehicle. As at March 2016, the number of such registered businesses was 154,842. Many couriers are contractors to the large and medium sized delivery companies, but their business tends to rely on peak periods with very limited volumes in between. 
Amazon has its own warehouse and delivery hubs in more than ten locations throughout Japan. They have been offering same day delivery to mostly the urban areas excluding the most remote islands. Such deliveries have been handled by Yamato and japan Post, but Yamato has begun to cut back on same day delivery services with an eye on pulling out of the service all together. Yamato has already been forced to cut back its service offering by removing the 12:00 pm to 2:00 pm delivery time slot due to rising costs and overtime work, and in the need for higher efficiency. 
Many e-commerce businesses are heavily dependent on Yamato, and as a result, they, too, are having to reduce their time certain delivery options. Online stationery and office supplies seller, ASKUL Corporation (whose name ASKUL means "delivered tomorrow") has revised its time certain delivery options on 20 June to align with those of Yamato. The same has been observed for major fashion retailer ZOZOTOWN, operated by Starttoday Co., Ltd. 
In response to inquiries by the Nikkei, ASKUL has revealed that they plan to enhance its delivery services for its SOHO and consumer business. 
Japan's largest online marketplace, Rakuten, has also announced plans to establish its own delivery service while in response to the Yamato shock, in April, Rakuten ran a campaign to offer 3x more loyalty points (1 point = 1 yen) to customers who successfully receive their purchases on the first delivery attempt. 
Japan Post is also running a campaign from April through September whereby consumers can earn Ponta points (convenience store chain Lawson's in-store loyalty program) and other benefits if they opt to receive their parcels at post offices or via parcel lockers. 

6.02.2017

Sagawa Tests Deep Learning AI Parcels Diagnostics Solution

Sagawa Express and artificial intelligence solutions developer Automagi collaborate to develop a Deep Learning AI Solution that measures and evaluates parcels.

Sagawa Express and Automagi announced on 31 May 2017 that they undertook the testing of a solution that uses deep learning AI (artificial intelligence) to not only measure parcels but to distinguish its shape, the presence or the lack thereof damage, and handling of parcels, a project approved by the Ministry of Economy, Trade and Industry and awarded to NTT Data Co., Ltd. 


Objective: a solution to help suppliers keep up with the growing demand of parcel deliveries



When it came to light in February 2017 that Japan's No.1 parcel deliveries company, Yamato Transport Co., Ltd.'s Union was asking management to reduce the number of parcels the company was taking in, shockwaves hit Japan. In no other country has domestic parcels delivery demands have grown to a point where service providers physically experienced saturation and overflow. Yamato has been trying desperately to keep up with surging demand by hiring more staff and outsourcing where necessary. But when reports of suicide from overworking and pressure and hours of unpaid overtime work would not stop, even management had to say, enough is enough. 
Against this backdrop, NTT data proposed that the labor-intensive operational processes in parcel delivery get some help from AI-driven automation. The company believes that by applying the latest deep learning AI engines, such tasks as acceptance into the warehouse, sorting, and even loading and unloading trucks can be automated as just a start with many more applications to be developed thereafter. 

Image Diagnostics Tested at Sagawa Sorting Center

Sagawa's role was to install the proposed image diagnostics device in its sorting center. The company hopes that in the near future, such solutions will enable it to reduce manpower at sorting centers as securing staff has become and will increasingly be more difficult as demand continues to grow rapidly.
At the front line of parcels logistics, the diversity of the shapes and sizes of parcels that are handled has traditionally made it a challenging, or daunting,  segment to automate. NTT Data's solution can automatically identify up to 1,000 different types of parcels for size, shape, how they are to be handled (fragile, "this side up," and so on), volume, and whether they are damaged or not. To date, such "diagnostics" of parcels is predominantly done by human beings. Once the parcels can be correctly identified,  such data can then be applied to create automated processes for loading and/or offloading, inspecting, and packing, says NTT Data, and thus, will lighten the burden on the drivers. 

Meanwhile at Yamato...

Yamato's Chronogate already has a robot arm that offloads parcels from cages (0:30 ~) and 3D scanners that scans parcels as they move on conveyer belts (the cross belt sorter 2:01~) that automatically sorts them.
Youtube Video: Daily Cargo published 1 October 2013