In school textbooks used when I was a student, the Port of Kobe and the Port of Yokohama were depicted as ports of a leading maritime nation. In today’s fiercely competitive international marine transportation industry, however, Japan is on the decline. This is almost unbearable to watch. While the ports of Hong Kong, Busan, and Singapore have maintained their competitiveness, all Japanese ports have lost theirs. This is attributable to a national policy failure. It is hoped that maximum efforts will be made to enhance the competitiveness of marine infrastructure with the aim of restoring Japan’s status as a maritime nation.
1. Promote Selection and Concentration and Improve Port Infrastructure to Meet Global Standards!
Under the national port policy that emphasizes “well-balanced development of national land,” as many as 997 ports have been constructed throughout Japan. The result is today’s miserable state. All Japanese ports have lost their competitiveness and Busan now serves as the hub for local Japanese ports from the Seto Inland Sea to the coast along the Japan Sea and as far as Iwate. In order to compete with Asian ports, it is necessary to promote selection and concentration, with efforts to improve port infrastructure concentrated exclusively on strategic ports. The government has designated “strategic ports for international containers” and “strategic ports for international bulk cargo transport.” It is demanded that best efforts be made to promote selection and concentration.
The volume of marine transport has significantly increased worldwide. In the last two decades, the volume of marine transport between Asia and Europe has increased roughly sixfold and that between Asia and North America around fourfold. In response, container ships have become larger and wider. It is necessary to focus investment on the improvement of infrastructure at carefully selected ports to a level equivalent to that of other Asian nations. Such investment is necessary to increase the depth of berths, improve access to ports, upgrade port facilities, apply advanced information technology, and increase the scale of port facilities.
2. Take Decisive Actions to Achieve Reform of Port Regulations to Make Japanese Ports the Least Expensive and Most Convenient in the World!
Being overly constrained by regulations, the Japanese port administration has caused ports in Japan to lose competitiveness in term of personnel, speed, and costs. While major ports in Asia operate 24 hours a day, those in Japan do not operate at night. In addition, in terms of costs, port dues and various other public charges are imposed: if the handling fees of container freight in Japan are indexed at 100, those of the Port of Busan, the Port of Singapore, and the Port of Kaohsiung in Taiwan are 79, 85, and 69, respectively. These figures show that fees in Japan are relatively high. To address these issues, it is necessary to reform port regulations to achieve the liberalization of port labor regulations, expedition of clearance procedures such as customs clearance, and realization of 24-hour operation of customs offices and gate opening at ports. To be chosen by the world, ports should be inexpensive and convenient to use.
3. Privatize Ports and Promote Management Integration to Enhance the Management Capacities of Ports!
The Port of Busan in South Korea was constructed by the public sector and is operated by the private sector. The sales efforts of the port operating company targeting major shipping companies throughout the world are outstanding. The Japanese branch, which is located at Marunouchi in Tokyo, is staffed with employees who speak fluent Japanese and promote sales aggressively. The port operator has also streamlined the management of the port and the improvement and maintenance of port facilities, such as gantry cranes. This is totally different from Japan, where municipal governments are responsible for the maintenance of facilities. In order to get ahead of major ports in Asia, it is essential for Japanese ports to generate economies of scale through management integration and hire personnel with sufficient managerial abilities to compete in the global market.
4. Encourage Foreign Capital Investments to Win the Global Competition!
Busan, which we should benchmark, aggressively provides a variety of incentives to attract foreign investment (shipping companies). For example, they offer incentives to international shipping companies, such as significant rent reductions for office and warehouse space at the port, a 100% exemption on direct and income taxes for three years followed by a 50% exemption for the subsequent two years, exemption from income and property taxes for seven to 15 years, a 100% exemption on tariffs, and application of reduced rates for value added tax. Unless Japan offers preferential treatment comparable to that offered by Busan, it will be difficult for Japan to attract international customers. From a geopolitical viewpoint, the gateway to Asia from Europe and the United States should be the Keihin and Hanshin regions of Japan. The government should prepare bold incentives to attract foreign capital.