(2) Streamlining the flow of inner-city physical distribution

Suburban areas designed for physical distribution $ {}^{Note1} $ had been developed in 20 cities and 29 locations (27 of which are already in service) by the end of March, 2014 in accordance with the Act on the Improvement of Urban Distribution Centers to enhance the urban functions of logistics and streamline road traffic through intensive location of distribution facilities.

To prevent roadside parking for cargo handling, the Ministry has encouraged local governments to include the installation of parking spaces for cargo handling in their municipal parking ordinances. As of the end of March 2013, municipal ordinances were amended in 90 cities to dictate the installation of parking spaces for cargo handling at commercial instillations having a certain scale or larger.

Measures that have been taken to streamline traffic flow include intensive actions directed at congestion bottlenecks, multilayerization of traffic intersection and resolution of railway crossings nearly closed at all times. In parallel, software measures, such as those aimed at driving joint transportation and delivery pursuant to the Low Carbon City Promotion Act and encouraging migration the use of private trucks to the use of commercial trucks $ {}^{Note 2} $ to boost load efficiency, have been driven.

(3) Further efforts to implement logistic services that are more sophisticated and that deliver better total efficiency

To accelerate the implementation of the 3PL business Note $ ^{3} $ further, the Ministry not only arranges for the environment in which logistic companies find it easier to make inroads into the 3PL business easier, by hosting human resources development and training sessions, publicizing regional business models and so on, but also seeks to generalize and simplify the logistic flow through a system of accreditation for total efficiency plans $ ^{Note4} $ in accordance with the Act on the Improvement of Urban Distribution Centers. As of the end of March 2014, 221 total efficiency plans were accredited in accordance with the Act.

## Section 3 Reactivating Industries

## Trends in Railway Industries and Measures

## (1) Railway business

a. Trends and measures in the railway business

The number of railway passengers carried in FY2012 increased from its year earlier level. At Japan Railway, transportation on Shinkansen increased while transportation on conventional railway lines transitioned sideways, with transportation on private railways on the increase.

The volume of railway freight transportation during FY2012 rose slightly from its year earlier level in both the number of tons and that of kilograms carried a year for reasons, such as rehabilitating the production sites that had been damaged by the Great East Japan Earthquake.

Railway operators, particularly urban operators, aim to keep comfortable and secure railway spaces, as by adding alphanumeric sequences along with route or station names. The introduction of transport e-money IC cards has progressed in the wake of Suica launched by JR East in 2001. Starting from March 2013, 10 kinds of such IC cards that had previously been used in the areas covered by JR and key private railways and the like have been made interoperable. Subsequently, IC cards have penetrated a growing number of railway operators and areas, promising added user convenience and regional revitalization.

Note 1 A large-scale urban distribution center intensively equipped with distribution facilities, such as truck terminals and warehouses, which is conveniently located for ready access to an expressway interchange, for example.

Note 2 A scheme of converting private motor trucks (used to their owners to carry private cargoes on their own) to commercial motor trucks (used to carry cargoes for fee on request from others) to enhance transport efficiency, as by moving mixed cargoes from multiple cargo owners, and thus curtain the shipping costs.

Note 3 Third-party logistics: An outsourcing service that undertakes a fully ingrated flow of physical distribution of cargoes from the cargo owners.

Note 4 A plan that is committed to integrating and expediting physical distribution mainly at a physical facility located in the vicinity of a social infrastructure, such as an expressway interchange or port, as by installing automated warehouses, information systems and the like while seeking concentrate transportation networks and share shipping and delivery operations.