The Japan Automobile Manufacturers Association (JAMA) recently published the results of its biennial “Standard Truck Market Trend Survey” for fiscal 2022. The survey aims to provide a chronological overview of heavy-duty truck ownership, purchase, and usage patterns, as well as changes in transportation needs, responses, and the market environment surrounding the logistics industry.
In contrast to the previous shipper survey conducted via interviews in fiscal year 2020, the 2022 survey employed questionnaires, similar to the methodology used in 2018. The survey also examined additional aspects, such as driver shortage awareness and intentions, safety awareness, environmental consciousness, next-generation eco-friendly vehicles, expectations and concerns about advanced technology, and the influence of social conditions.
The user survey conducted as part of JAMA’s 2022 Standard Truck Market Trend Survey sheds light on several additional aspects of the heavy-duty truck industry.
Business Conditions: While the private sector shows signs of recovery from the coronavirus pandemic, half of the transportation industry continues to struggle. Sales and business volume remain below pre-pandemic levels, and soaring energy prices significantly impact business operations.
Demand Trends: Despite a significant decline in total domestic transportation volume in 2008 due to the pandemic, large transportation companies and firms with robust business operations demonstrate a high intention to purchase trucks.
Awareness and Intention Regarding Driver Shortage: As efforts to tackle driver shortages in 2023 and 2024 progress, the industry focuses on immediate issues such as increased use of expressways and higher freight rates and salaries.
Safety Awareness: The transportation industry is implementing health management measures, including face-to-face roll calls, sobriety checks, and considering the introduction of IT-related equipment. In the private vehicle sector, the implementation rate of pre-boarding sobriety checks has significantly increased.
Environmental Awareness and Next-generation Environmental Vehicles: Both users and shippers express a need for eco-driving and fuel-efficient vehicles. However, the intention to introduce carbon-neutral hybrid vehicles remains low, with just over 20% of the medium-sized transportation industry considering this option.
Expectations and Concerns about Advanced Technology: The primary technology enabling digital transformation (DX) in the industry involves in-vehicle equipment. While 40% of respondents implement eco-driving measures, slightly more than 20% have adopted corresponding systems. Shippers prioritize freight costs over advanced safety measures, making it challenging to pass on price increases to customers and consumers.
Impact of Social Conditions: The sharp rise in energy and raw material prices has had a significant impact on truck users and shippers, further complicating the industry’s landscape.
Summary of Standard Truck Market Trend Survey Results
While signs of recovery from the coronavirus pandemic are visible in the private sector, half of the transportation industry continues to face challenges as both sales and business volume remain lower than before the pandemic. The soaring energy prices are also significantly impacting business operations. In the survey results, the number of businesses experiencing an improvement in recent business conditions has decreased in the transportation industry since the previous survey in 2018, while increasing in the private sector since the last survey in 2020.
Compared to two years ago, the cargo handling volume level has remained consistent in the transportation industry, moving from 92.0% to 93.0%. In contrast, the private sector has seen an increase from 92.5% to 99.2%. Although the percentage of “busy” truck operations in the transportation industry has increased since the last survey, it seems that business conditions have not yet improved significantly.
When comparing the current business conditions with those before the coronavirus pandemic, around half of the transportation industry reported a decrease in overall sales, transportation service cases, transportation volume, and truck operation frequency. These proportions are higher than those in the private sector, indicating that the transportation industry continues to face difficulties in recovering from the deteriorating business conditions caused by the pandemic in 2020.
Global social circumstances have led to energy prices reaching their highest level in the past year since 2016. Survey results show that many respondents reported increased fuel costs due to soaring energy prices, affecting their businesses. Both the transportation industry and private sector identified rising fuel costs as the most common issue in truck transportation.
Shippers also reported a significant increase in the problem of rising fuel costs compared to the previous survey in 2018, ranking just below the increasing transportation expenses.
Although the total Japanese domestic transportation volume significantly decreased in 2020 due to the impact of the coronavirus pandemic, large transportation companies and businesses with strong operations have high intentions to purchase trucks. According to the Ministry of Land, Infrastructure, Transport, and Tourism‘s transportation-related statistics, the domestic cargo transportation volume, in terms of both tonnage and ton-kilometers, increased in 2016 but has been declining since 2017. The decline was even more significant in 2020 due to the pandemic. While 2021 saw an increase, it did not reach pre-2019 levels.
Trucks have followed a similar trend. The percentage of commercial trucks in the ton-kilometer composition has decreased by four points over the past decade, accounting for just under 50% in 2020. The number of new medium-duty truck sales began to decline in 2019, with a particularly low figure of 57,000 units in 2022, the lowest in the past decade. Both 4-ton and 10-ton class trucks saw a decrease of around 10,000 units compared to 2021.
The number of medium-duty trucks in operation has been gradually increasing since 2012. According to the survey results, although “replacement” purchases remain the primary focus in the transportation industry, there has been a decrease in “replacement” and an increase in “additional vehicle” purchases since 2020 when compared to the years leading up to 2018.
Moreover, transportation companies with a large number of trucks and those that have experienced an improvement in business conditions have a higher proportion of businesses that have increased their overall truck fleet size in the past two years and have a high intention to purchase more trucks over the next five years.
Note: The transportation-related statistics are from the “Automobile Transport Statistics Yearbook,” “Railway Transport Statistics Yearbook,” “Domestic Ship Transport Statistics Yearbook,” and “Air Transport Statistics Yearbook.” New vehicle demand and new vehicle registration numbers are expressed in terms of the number of units in the calendar year (January to December).
Awareness and Intention Regarding Driver Shortage
Despite ongoing efforts to address the “2023/2024 problem,” the focus remains on immediate challenges, such as increased use of expressways and raising freight rates and salaries. Both transportation companies and private vehicle operators continue to rank “driver shortage” and “aging drivers” as top transportation issues.
In this context, concerns about a further driver shortage due to the amendment and implementation of workstyle reform laws, increased labor costs, and reduced driver income are associated with the “2023/2024 problem.” In response, slightly under 40% of transportation companies reported that they are currently implementing measures, while about 45% said they have not started but plan to in the future. Although many businesses are making progress, the current efforts mainly involve increasing the use of expressways, negotiating higher freight rates with shippers, and raising driver salaries, focusing on addressing immediate challenges rather than IT and vehicle adoption.
On the shipper side, 60% believe that the impact of the 2023/2024 problem will result in the most significant increase in truck transportation freight rates.
In the transportation industry, face-to-face roll calls and sobriety checks are being implemented, with a focus on health management, and consideration is also being given to the introduction of IT-related equipment. In the private vehicle sector, the implementation rate of sobriety checks before boarding has significantly increased.
In the transportation industry, “sobriety checks before boarding” are the most common safety measure against traffic accidents, with 90% of companies implementing them. Over 70% of companies also engage in face-to-face roll calls and health management-centered driver management. In the private vehicle sector, the proportion of “sobriety checks before boarding,” which became mandatory in April 2022, has increased significantly compared to the previous survey.
In cases where the need for safety support equipment was felt due to near-miss incidents, about 40% of transportation companies reported incidents related to the front and rear, such as “rear-end collisions” and “cutting in from the front.”
In the transportation industry, the top considerations for future introduction (or expansion) of IT-related equipment include roll call-related devices and alcohol interlocks, suggesting that safety measures focusing on driver health and behavior management are expected to be introduced. While the private vehicle sector has rapidly advanced in implementing sobriety checks, the intention to introduce (or expand) alcohol interlocks in the future remains low, at less than 10%.
Environmental Awareness and Next-Generation Eco-Friendly Vehicles
Eco-driving and fuel-efficient vehicles are in demand among both users and shippers. The intention to introduce hybrid vehicles as a carbon-neutral solution remains limited, with just over 20% of medium-sized transportation companies considering it.
Both the transportation industry and private vehicle users rank “implementing and managing eco-driving” as the top environmental measure being implemented. This is also a top measure currently designated by shippers to the transportation industry. In terms of future measures shippers want to designate, “addressing carbon neutrality” and “designating the use of fuel-efficient vehicles” rank highly. The intention to use fuel-efficient vehicles in the future is the highest among both transportation companies and private vehicle users. The demand for fuel-efficient vehicles is shared by both users and shippers.
The proportion of companies considering the introduction of environmentally friendly vehicles is just over 20% for medium-sized hybrid vehicles in the transportation industry and 30% for private vehicle users. However, about half of the transportation industry and over 60% of private vehicle users are undecided on the introduction timing, indicating that while there is interest, concrete plans for when to introduce such vehicles have not been made.
As for the challenges of introducing these vehicles, both transportation companies and private vehicle users rank “high vehicle prices” as a major issue, with around 80% expressing concern. “Limited charging facilities during operation” and “short driving range” also rank highly, indicating that the current focus for the introduction of these vehicles is primarily for “medium and short-distance trunk transport.”
Expectations and Concerns for Advanced Technologies
When it comes to digital transformation (DX) efforts, on-board equipment is the focus. However, despite a 40% implementation rate of eco-driving measures, the adoption of corresponding systems remains at just over 20%. For shippers, prioritizing “transportation costs” supersedes “advanced safety measures,” making it difficult to pass on price increases to clients and consumers.
Both the transportation industry and private vehicle users see the advantages of autonomous driving and platooning as “alleviating driver shortages” and “reducing accidents,” while the disadvantages include “system malfunctions and failures” and “drivers dozing off or losing focus.” Concerns about “rising vehicle prices and maintenance costs” have increased for both groups since the last survey. For shippers, the primary concern is the “demand for increased transportation costs due to rising vehicle prices.”
In the transportation industry, DX adoption (the introduction of IT-related equipment and systems) is focused on “drive recorders,” “ETC 2.0,” and “digital tachographs,” with 50-80% of businesses employing these on-board devices. About 30% of companies have implemented “vehicle location verification systems” for operational management. Regarding safety driving support systems, 40% of transportation companies are implementing and managing “eco-driving,” but only just over 20% have adopted an “eco-driving management system.”
Shippers indicate a high demand for “drive recorders,” “vehicle location verification systems,” and “cargo tracking systems” for use by transportation providers. Although the adoption rates for the first two items are high in the transportation industry, the adoption rate for “cargo tracking systems” is low.
When shippers request services from transportation providers, the priority is on “transportation costs” over “advanced safety measures.” Regarding the transfer of costs related to safety measures, nearly half of the shippers responded that it is difficult to pass on price increases to clients and consumers.
Impact of Social and Economic Factors
The soaring energy and raw material prices have significantly affected truck users and shippers. In the transportation industry, over 70% of respondents said that increased fuel costs due to the rising energy prices have impacted their businesses in the past year. Additionally, around 30% mentioned the effects of semiconductor shortages caused by the coronavirus pandemic on the delivery of transportation equipment, while just under 20% cited having to pass on the increased costs to customers by raising transportation fees.
Around 20% of private vehicle users also reported being affected by the shortage of semiconductors and other pandemic-related factors on the delivery of transportation equipment. During the peak periods of the coronavirus pandemic, manufacturing industries faced production adjustments and shutdowns, leading to a noticeable impact on the delivery of transportation equipment for users overall.
Moreover, the proportion of economic concerns, such as the impact of soaring energy prices and transferring the increased costs, is higher among businesses with larger fleets of trucks. Among shippers, the most common reason for improved business performance is “recovery from the pandemic,” but on the other hand, those that experienced worsening performance identified “rising raw material prices” as the most significant factor, outweighing the impact of the pandemic. This suggests that in addition to the coronavirus, rising prices are a primary cause of poor business performance.
Visual: UD Trucks