Two Years Since the 2024 Problem – Has the Situation Changed for Small and Medium-Sized Transportation Companies? AI Business OS "LogiOS" Challenges the Structural Problem of an "80% Empty Run Rate"

⚡ Do you have these challenges?

Often driving empty because you can't get return cargo.

Dispatching relies solely on the experience of veterans, and the risk of knowledge being siloed is high.

Managing working hours with Excel and manual calculations.

Creating invoices at the end of each month is a painful task.

Want to implement DX, but don't have the budget for multiple tools or dedicated staff.

If even one applies to you, LogiOS can help.

Pre-register now (free)

*Priority guidance will be provided before the official release.

Leach Inc. (Headquarters: Tokyo, CEO: Takuya Tominaga, hereinafter "the Company") has started pre-registration for "LogiOS," an all-in-one AI business OS for small and medium-sized transportation companies.

This report will organize the current state of the transportation industry, as revealed through interviews with industry stakeholders and independent research, and explain LogiOS's goal of "business DX for small and medium-sized transportation companies."

Inside a Giant Industry with 64,000 Companies

The number of freight trucking businesses in Japan is approximately 64,000. This scale surpasses convenience stores (approx. 56,000 stores) and is one of the industries with the largest number of businesses in Japan. However, a closer look at its composition reveals a structural imbalance.

According to statistics from the Japan Trucking Association, approximately 70% of businesses have 20 or fewer vehicles. If narrowed down to 10 or fewer vehicles, this ratio becomes even higher. In terms of sales, it is estimated that nearly half of businesses have annual sales of less than 100 million yen, and a considerable number have annual sales of less than 50 million yen.

In other words, Japan's logistics are supported by a collection of tens of thousands of small and micro-enterprises.

This structure has two aspects:

Flexibility: Able to respond meticulously to the needs of shippers in each region. Shippers such as local manufacturers, agricultural cooperatives, and hospitals manage their logistics through long-standing relationships with local small and medium-sized transportation companies.

Vulnerability: Individual businesses have weak negotiating power and are easily directly affected by cost-cutting pressures. Cases where fuel price hikes and rising labor costs cannot be passed on to prices are endless.

Large transportation companies have in-house system development departments and are advancing the automation of dispatching and the sophistication of dynamic management. On the other hand, small and medium-sized transportation companies lack the investment capacity for such initiatives. It is not uncommon for company presidents themselves to handle everything from computer setup to troubleshooting. This "digital divide" is a bottleneck hindering overall productivity improvement in the industry.

"Only 20% of driving is paid" – The Reality of the Empty Run Problem

When the Company interviewed industry stakeholders, what was most shocking was the reality of the empty run rate.

"Most trucks run empty. Only about 20% of the total driving is paid."

— A person who has been involved in the management of a small and medium-sized transportation company for many years.

Loading cargo at the shipper's location and unloading it at the destination. Only the "time spent carrying cargo" is subject to freight charges; empty runs to the destination and empty runs back are all costs. Drivers and dispatchers constantly make calls to secure return cargo – this remains the daily reality of the industry.

The Ministry of Land, Infrastructure, Transport and Tourism's survey also revealed the following realities:

Indicator | Reality ---|--- Actual loading rate (proportion of driving with cargo) | Early 50s Loading efficiency (actual load vs. maximum load capacity) | Around 40%

This calculates to nearly half of the driving distance being empty, and even when carrying cargo, it's less than half of the maximum load capacity.

This inefficiency incurs enormous costs. Even when empty, all the following costs are incurred as long as the vehicle is running:

Fuel costs

Tire wear

Toll road fees

Driver labor costs

Securing return cargo requires information sharing with multiple shippers and transportation companies. However, small and medium-sized transportation companies lack the time and resources to expand such horizontal networks, resulting in a structure where they continue to rely on the personal method of "calling acquaintances in the industry."

1990s Deregulation – What "Liberalization of Entry" Brought

To understand the current structural problems, we need to go back to the 1990s.

1990: Enforcement of the Revised Logistics Act – Transition from a licensing system to a permit system, significantly lowering entry barriers. Freight rates also changed from an approval system to a notification system, promoting free competition.

Late 1990s: Normalization of oversupply – The number of businesses surged from approximately 40,000 before deregulation to over 60,000. Freight rates continued to decline amidst excessive competition.

1997: Abolition of operating area restrictions – Small and medium-sized transportation companies that had operated in local areas were suddenly exposed to price competition on the same playing field as large national companies.

"Companies appeared that would take on work for 50,000 yen that used to cost 100,000 yen. If they tried to make up for it by doing more runs, driver working hours would increase."

— This vicious cycle plagued the industry throughout the 2000s and 2010s.

The operating profit margin for the trucking industry has been 1-3% for many years.