Japan's Economic and Freight Outlook and Short-term Freight Movement Survey in Japan
Published: 15/09/20
Nittsu Research Institute and Consulting, lnc. (NRIC), one of the subsidiaries of Nippon Express, publishes "Japan's Economic and Freight Outlook" and "Short-term Freight Movement Survey in Japan (Nittsu Soken Tan-kan)" quarterly.
"Japan's Economic and Freight Outlook" is a survey that has continued for over 40 years since the first survey in 1974. The purpose is to investigate and analyse the trends of Japanese economy and freight transport volume of domestic freight and international freight of Japan, and to predict short-term trends of six months to one year ahead. While many research institutes carry out economic forecasts, there is no other institution that makes full-scale forecasts of Japanese freight transport.
"Short-term Freight Movement Survey in Japan (Nittsu Soken Tan-kan)" conducted the first survey in October 1988 with the aim of grasping the latest trends in corporate logistics, and since then has continued at a pace of twice a year (1st half and 2nd half). Since 2002, it has been conducted quarterly.
The survey covers 2,500 major manufacturing and wholesale business establishments in Japan. Respondents are asked to select from the three options of "increase", "stay flat", "decrease" for the actual results (expected) for the current period and the forecast for the next period for 6 items (domestic shipment volume, transport mode, import/export freight volume, inventory, freight charges and distribution cost ratio). Then, the number of responding companies for each option is aggregated for each survey item, and the ratio to the total number of companies is calculated and presented as a trend judgment index. In the June 2020 survey, we received responses from 874 companies and the response rate was 35.0%.
Economy
Global economy will shrink by 4.9% in 2020 due to the COVID-19 pandemic (IMF forecast). The Japanese economy is heavily damaged by the consumption tax hike in October 2019 as well as the Corona Shock. The real economic growth rate in FY2020* is estimated to be 5.6% decrease in Japan, which is much lower than that of the Lehman Brothers crisis in FY2008 with 3.4% decrease.
Domestic freight transport of Japan
Due to the Corona shock, the total domestic freight volume in FY2020 is expected to decrease by 6.9% to a large negative. The growth rate is expected to be below the FY2009 level (6.0% decrease), which fell sharply due to the Lehman Brothers crisis. Consumption-related cargo and production-related cargo fell sharply, -7.4% and -9.2%, respectively, due to sluggish exports in addition to the collapse of private demand such as personal consumption and capital investment. Construction-related cargo has also fallen to -4.0% due to a significant decrease in housing investment.
Rail freight
Freight transport by JR (Japan Railway) container in FY2020 is expected to be stagnant again and decreased by 6.3%. The freight volume for most items fell below the previous year's levels due to the economic deterioration caused by the Corona Shock. Temporary relief from the shortage of truck drivers is also a negative factor for railway freight transport.
Wagonload freight is estimated to decrease by 5.0% in FY2020, a negative figure for the third consecutive year. Significant decline in FY2020 is caused by continued decrease in oil demand. In the first half of the year, demand for petroleum products was inevitably reduced due to self-restraint from going out after the Japanese government's declaration of the state of emergency. In the second half of the year, a slight decrease is expected as a reaction of the decrease in the previous year.
Truck freight
Due to diminished consumption of all commodities in FY2020, the transport volume by commercial trucks is expected to decrease by 7.4%, a minus for the first time in two years. Although special demand is expected for some home appliances such as personal computers and air conditioners, the volume of consumption-related cargo will fall due to factors such as self-restraint from going out. On the other hand, sales of general machinery, automobiles/automobile parts, steel, chemical products, etc. will be sluggish, to the minus for the first time in 5 years. Construction-related cargo will be weak due to a significant decrease in housing investment.
Freight transport by private trucks is expected to remain inactive with 5.7% decrease in FY2020. In FY2020, consumption-related and production-related cargo will decrease significantly. Although public investment is solid, housing-related investment is weak, therefore construction-related cargo will decrease slightly.
Source: www.nipponexpress.com
