Second, demand shifted from private truck transport to commercial trucks. This demand shift brought about a sharp traffic increase since 1980. In this period, Japan's manufacturing industry changed structurally; products also changed from heavy and bulky goods to light and compact goods. At the same time, trucking companies developed several new services that created comparative advantages of commercial trucks over private trucks in handling light and compact freight. Figure 7 shows the change of weights per shipping lot by all transport modes. It is clear that the weight of one cargo unit greatly dropped between 1980 and 85. $ ^{9} $

Third, since mid-1970s manufacturing industries in Japan began to require much sophisticated logistic systems to modernize their production process. The commercial carriers could (or were forced to) adjust themselves to supply these high quality services, and they succeeded in expanding their business. A typical such service is the so-called Just in Time (JIT) logistic system. In this system, carriers are required to deliver parts to the right place and on time. In such systems, however, some redundant capacities and integrated transport systems are needed. In this respect, commercial carriers were in a favorable position. $ ^{10} $

#### 4.2. Changes in the Trucking Industrial Structure

The subject of this subsection is whether or not the regulatory changes in 1990 had substantial effects on the structure, behavior and performance of the trucking industry. For the purpose of this subject, we will investigate the trend of entries into and exits from the industry,

the public money in order to have made the competition based on “equal footing.” The objection of trucking companies and the Ministry of Construction (the MoC) which is responsible for the road construction and maintenance was as follows. First, in Japan, there was (and still exists) a special account in the public finance solely for road constructions and the source of this special account came from the fuel tax revenue. Second, expressways were constructed and maintained by a toll financing system (see Yamauchi $ [1994] $ ). The trucking companies and the MoC insisted that since these facts meant that road users bore the cost of roads as a whole, the competition between the rail and the trucking was not necessarily distorted. Ever since the dispute did not develop, and the road financing system did not change. It should be noticed that, however, the fact that road users pay their costs as a whole does not mean that the trucking companies bore their costs. Since passenger cars are taxed much heavily than trucks, it is likely that trucking companies are undercharged compared with the costs they impose on the road system. Moreover, if we take into account the external or environmental costs of trucking, the discrepancy between the cost they are charged and that they should be charged grows. This seems to be the most serious problem in the Japanese trucking industry.

$ ^{9} $ These data are based on a five-year survey on net freight movements by the MoT, so we cannot get annual data.

$ ^{10} $ Recently such systems as JIT are criticized for its making external diseconomies, especially traffic congestion.