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BMI: Japan - Longer Opening Hours To Increase Efficiency And Throughput At Japanese Ports

04-01-2011 06:34 PM CET | Logistics & Transport

Press release from: dynamic technologies Gmbh, Köln, Germany

Upside Risk From Longer Opening Hours

Upside Risk From Longer Opening Hours

BMI believes plans to introduce 24-hour operations at Japanese container terminals could improve efficiency and make the country's ports more competitive. Currently, Japanese container terminals operate for eight hours per day, compared with round-clock-facilities overseas, with the result that throughput volumes are reduced. Nevertheless, BMI believes the Japanese land and infrastructure ministry will face considerable opposition from terminal operators who believe longer opening hours will only serve to increase costs.

A recent pilot project that kept cargo container terminals open later into the night at the nation's six major ports proved highly effective in boosting shipment volume, according to Japan's land and infrastructure ministry. Currently, domestic container terminals are allowed to handle cargo between 8.30am and 4.30pm, while the majority of the world's major container terminals are operational 24 hours. The six ports that participated in the pilot project are Tokyo, Nagoya, Kobe, Yokohama, Osaka and Yokkaichi in Mie Prefecture. To study the feasibility and effects of extending operating hours, the ministry kept terminals at the six major ports open until 8pm. Trials were launched in May 2009 at the Nagoya, Kobe and Yokkaichi ports, in March 2010 at the Yokohama and Osaka ports, and in July 2010 at Tokyo Port.

The project found that throughput at most of the ports increased considerably as a result of the extended operating hours. The number of containers dealt with during the 4.30pm-8pm period at Nagoya Port in December 2010 was 2.3 times higher than the figure a year earlier, the ministry said. Corresponding figures at Yokohama and Osaka ports were about five times higher, though the number at Tokyo Port remained almost unchanged.

Based on the results of the pilot project, the ministry said it plans to encourage terminal operators to gradually switch to 24-hour schedules. BMI notes, however, that while the Japanese business community has been calling for longer opening hours in order to bring ports up to international standards, terminal operators have resisted making the change out of fear their personnel costs would increase. While longer operating hours would of course mean a higher wage bill for operators, we believe that ultimately this would pay off in terms of efficiency and increased throughput.

Given the fact that Japan's consumer outlook is decidedly weak over our forecast period, BMI believes the country's container terminals will have to increase efficiency if they are to survive. Severely affected by the global financial crisis, consumer spending in Japan remains fragile, with high unemployment levels, deflationary pressures and a fiscal stimulus slowdown combining to suggest that this weakness is likely to persist for some time. Despite the grim domestic outlook, Japan's shipping sector stands to benefit from rising demand from emerging markets - especially China and India - which could compensate for its own weak demand and affect the country's port throughput. Longer opening hours would increase Japanese ports' competiveness and make them a more attractive port of call, enabling the country to take advantage of growing traffic in the region due to increasing intra-Asia trade volumes.

BMI: Japan Freight Transport Report Q1 2011:

BMI: Further Reports: founded in 2002 has emerged as a leading online portal for market surveys and market research in German speaking areas. Four years later the English language portal was introduced due to the extraordinary success of the portal. Again one year later - the Spanish spoken portal - was founded. The objective of the three portals is to competently and efficiently support consultants and decision makers in management, sales and marketing in the search for worldwide market research. Prospective buyers can look into more than 60,000 market surveys from more than 200 international publishers, current market data for more than 6,000 branches worldwide, 10,000 company profiles as well as a free-of-charge research and recommendation service for individual market research.
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