The Japanese government plans to work with domestic firms to test new international supply routes as soon as March, as it aims to diversify freight options in response to recent supply chain instability highlighted by the coronavirus pandemic and the war in Ukraine.
With international events causing delays and a rise in transport costs, the Ministry of Land, Infrastructure, Transport and Tourism intends to ensure a reliable freight system by preparing alternative shipping and train links to reach the United States and Europe.
Delays in international freight can lead to shortages in raw materials and goods, and rising costs of transporting the items can also push up prices on many commonly-used products. Among the areas the transport ministry will be investigating under the scheme are cost, time and customs clearance issues.
Until the end of February, the ministry is recruiting Japanese companies including cargo firms and logistics businesses to participate in testing deliveries with government backing of 1 million yen ($7,800) per consignment. A report on its activities is intended to be made around the fall.
Although disruption to the international freight system is easing, the transport ministry maintains it is “important to secure complementary replacement routes in case of emergencies.”
Among the alternative routes planned are the use of ports in Canada, Mexico and the east coast of the United States instead of the U.S. west coast, where ships were left unable to offload their cargo during the coronavirus pandemic due to truck driver shortages.
The invasion of Ukraine has also limited supply line options via Russia, with flights having to divert around its airspace and its Trans-Siberian Railway seeing less use.
Strikes for more pay by dockworkers in Europe have also caused issues at seaports, and Indian Ocean and Suez Canal supply lines are at risk of blockage from conflicts and ships running aground.
As a result, for goods being moved from Japan to Europe, the ministry is considering routes leaving regional ports on the Sea of Japan side of the country that would then take sea and railway routes via China, Central Asia, the Caspian Sea, Turkey and elsewhere.
But few Japanese companies currently use the routes, and in addition to cost and time issues, the ministry will need to test the effects of goods being shaken during the journey as well as their temperature during transit.
An official at the transport ministry said it will “carry out investigations including on what improvements are needed to employ the new routes.”
Source: Kyodo News