Micro hubs: big in Japan

Author: Edin Osmanovic, Business Development Manager, Panasonic Germany

Micro hubs are proving an attractive solution for congested urban environments. These small, at times temporary, distribution hubs are located within city limits. Delivery trucks deposit packages here that are then picked up by local couriers for last-mile delivery. In my previous blog post, I promised I would discuss how this ingenious solution is being leveraged in Japan in greater detail.

A logistics nightmare

The logistics environment in Japan is among the most challenging in the world. The country’s cities are packed to the brim, with high traffic congestion, real estate shortages, and significant air pollution. At the same time, rural areas are depopulating, making it difficult to serve them profitably. In addition, an aging and shrinking population has created a fiercely competitive labour market. And these are not recent developments, but problems that the island nation has been facing for some time.

Think small, think different

So it comes as no surprise that Japan was among the first to introduce micro hubs nearly two decades ago. The hubs, called satellite centres in Japan, are tiny, narrow offices with no parking for conventional road vehicles. In the early hours of the day, trucks drop off containers with pre-sorted parcels. These are then picked up and delivered to their destination using threetars – electric bicycles fitted with a refrigerator box and a rear cart. Yamato Transport, Japan’s largest parcel-delivery business, began introducing these e-bikes in 2002. By late 2008, the company had amassed around 1,300, operating them in urban areas like Tokyo and Osaka. Today, 15 percent of their home deliveries are made using threetars. These vehicles have proven particularly popular in very dense housing areas where parking is scarce.

In suburban areas, a special agreement with public transport organisations allows van drivers to park at unoccupied bus stops, and unload carts containing parcels for the vicinity. The e-bike couriers simply wait at the designated stop to receive the carts for their tour. This method cleverly re-purposes available space.

Public transportation has also helped ease the issues encountered in rural areas, with parcels being conveyed in buses and trains. This is proving to be a win-win for both parties. This helps subsidise the costs of operating low-traffic routes, while minimising the number of delivery vans and human resources needed to serve the area.

Multiple benefits

The adoption of micro hubs and e-bikes has addressed many of Japan’s urban concerns. It is easier to find a suitable site for a small distribution hub in crowded cities. And threetars help combat traffic congestion and air pollution. Moreover, their drivers do not require a licence – expanding the potential pool of candidates. 

Hands-free travel

Micro hubs and threetars are not the only pioneering logistics solutions in the Land of the Rising Sun. There is also a luggage-free travel service. Large items, such as suitcases, are transported from the airport to the first hotel, from hotel to hotel, and from hotel to airport. So travellers can simply drop off their baggage and begin exploring right away. This helps reduce congestion in public transport and improves safety, as it reduces the number of people traveling with large luggage items in trains and buses. The service is a joint effort between Yamato, Panasonic, and JTB Corporation, Japan’s largest travel agency.

Good for them, good for us

Micro hubs have undergone trial by fire in Japan. Their success underscores their potential elsewhere. This is particularly true of Europe, where governments are ramping up efforts to cut carbon emissions. If you have any questions, or would like to learn more about innovative logistics solutions of this kind, please contact me at edin.osmanovic@eu.panasonic.com