Introduction

It is 20 years since Japan Freight Railway Company was established in 1987—the time has really flown by!
From the late 1970s, JNR’s freight division faced a series of setbacks and the system was overhauled at the February 1984 timetable revisions when JNR abolished the yard system nationwide and started operating direct freight trains. Some critics even adopted the bold stance that rail freight was unnecessary because goods could be carried more efficiently by other modes. Faced with these circumstances, the Supervisory Committee for JNR Reconstruction published a paper entitled A Suggestion for Reforming JNR in which they suggested that rail freight in Japan should be organized as an integrated independent business, making full use of rail’s advantages in carrying certain freight categories. However, the specific measures were left up to the government and JNR.
As a result, JR Freight was established to ensure profitability based on a framework whereby the six newly formed JR passenger companies would take ownership of lines and infrastructure and JR Freight would run freight services over these lines by paying the passenger companies a track usage fee based on incremental costs.

20-year History of JR Freight

In the first 6 years of operations (1987–92), JR Freight posted annual profits due in part to concerted efforts to transition freight transport from road to rail and also due to the buoyant Japanese economy.
Unfortunately, the company fell into the red for the next 8 years (1993–2000) caused by a significant drop in freight volumes resulting from the collapse of the ‘bubble economy’ and transport deregulation allowing truck operators to enter the market more easily. This lacklustre performance was despite concerted efforts by management and employees to streamline operations, including substantial personnel reductions. The 1995 Great Hanshin Earthquake severed operations on the Tokaido main line for about 100 days, which seriously affected JR Freight operations.
The company returned to the black in FY2001 where it managed to remain until FY2006 although profitability was almost negligible (Table 1). During this time, the company has made tremendous efforts to diversify it business operations; in addition to freight transport, we have rapidly developed related businesses, such as leasing buildings used as distribution facilities to make optimum use of land acquired by the company and thereby stabilize our platform.
Looking back over our 20-year history in rail operations, we have broken away from the confines of the JNR era and have successfully established a highly efficient transportation system. With the exception of crude oil, which is suited to bulk wagon transport, we have created a shift from freight wagons to containers (Table 2).
At the same time, we have implemented a range of measures to tailor containerized transport to the needs of shippers. First, JR Freight has increased speeds to expand the next-day delivery region. In addition to achievements such as the completion of the Seikan Tunnel between Honshu and Hokkaido, and the Honshu–Shikoku bridges, we have introduced new containers and inverter locomotives using technological breakthroughs to run at higher speeds. We have also improved container capacity by enhancing infrastructure thanks to government support for increasing the length of freight trains on the Tokaido and San’yo main lines, and by introducing the Effective & Speedy Container Handling System (E&S System) incorporating loading and unloading lines at 27 stations. We have also installed top lifters to handle larger containers with loads equivalent to a 10-tonne truck, levelled out transportation demand to make best use of capacity, and streamlined forklift truck operations. Furthermore, we have introduced the IT-FRENS & TRACE system for collecting various basic data at stations to use resources more efficiently. Nevertheless, there are still many more issues to solve, such as replacing the large number of old locomotives still in operation with new models as soon as possible.

Memorable Events

I would like to touch upon three especially memorable events during my time as President of JR Freight. The first was the 31 March 2000 eruption of Mt. Usu (732 m) in Hokkaido, which prevented normal services on the Muroran Line—the main rail artery between Honshu and Hokkaido—for 71 days. Of course goods, had to be carried somehow between Honshu and Hokkaido and I remember vividly how we took the initiative in using every conceivable mode to ensure freight reached its destination, including diverting trains via the Hakodate Line, carrying freight by truck instead of train and also using ships for transportation. The unusually large number of natural disasters that have occurred in Japan recently reaffirms the importance of formulating plans for freight transport at such times.
The second event was the problems associated with projected shinkansen lines and conventional non-shinkansen lines running parallel to them. With the extension of the Tohoku Shinkansen to Hachinohe, an adjustment system was introduced whereby the increase in track fees paid by JR Freight to JR East for using the tracks between Morioka and Hachinohe is reimbursed to JR Freight from the shinkansen track usage fees paid by JR East to Japan Railway Construction Public Corporation (JRCC). It took the government and the Ministry of Land, Infrastructure and Transport 10 years to implement this system, which constitutes a basic rule on how joint public–private ventures will acquire ownership of conventional lines running parallel to new future shinkansen lines. I well remember the day when this was finally achieved because it was an important topic that could have seriously impacted our company’s future.
The third event is the transfer of the facilities at Umeda Station to Suita Freight Terminal and Kudara Station. This project will complete the infrastructure reforms advocated by the JNR restructuring and it is 20 years since I first became involved as head of the Kansai branch office when JR Freight was established. Although the project has seen many twists and turns, I am delighted that construction of the modern Suita Freight Terminal is now underway, because it will strengthen our partnerships with the freight shipping community.

Future Outlook

JR Freight Chronology