Marc Scribner

@marcscribner.com

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Transportation policy @reason.org. Covering infrastructure, planes, trains, and automobiles—especially when robots are involved. https://marcscribner.com

A government-appointed committee today urged a Japanese public-private fund to avoid joining greenfield high-speed rail (HSR) projects as an equity partner after the fund reported huge losses from overseas projects.

The Japan Overseas Infrastructure Investment Corporation for Transport & Urban Development, should not adopt a comprehensive role in HSR packages covering civil engineering, train tracks and railcar, according to a draft report by the committee comprising academic and business experts.

It is not viable to use a public-private fund to invest in long-term, large-sized overseas infrastructure projects in the early stages, as these are high-risk and do not offer a potential for earnings, the committee stated in the report.

Any equity investments in such projects in their early stages should lie outside the fund’s role, due to their high risk, the report stated.

A shrinking truck driver workforce and a new labor policy limiting driver hours have spawned a looming logistics crisis in Japan, known as the “2024 problem.” Japanese industry turned quickly to automation as a potential solution. The government, for its part, has been similarly investigating automated freight transportation, including new dedicated infrastructure and cargo vehicles that would constitute a new mode of surface transportation. Japan’s approach to its partially self-inflicted logistics problem can be contrasted with freight automation efforts in the United States, where developers of automated road and rail cargo vehicles plan to mostly leverage existing infrastructure.

In April 2024, the Japanese government ended an exemption on overtime hours for truck drivers. These stricter labor regulations coupled with a shrinking driver workforce have alarmed the broader business community that is dependent on reliable freight movements. In response to widespread concern that government policies have amplified a looming goods-movement crisis, Japan’s Ministry of Land, Infrastructure, Transport, and Tourism established a Study Group on Automated Logistics Roads that began meeting in Feb. 2024.