Both importers and exporters are benefitting from strong trade relationships between the U.S. and Japan, and the strong economies that are prevailing in both countries.
To call Japan a strong business partner for U.S. companies and consumers would be a major understatement. Since 2002, Japan has nearly doubled its investments in the U.S., investing more here than it does in Europe or Asia. Japanese companies employ nearly 840,000 American workers, roughly 46% of which work in manufacturing and earn an average salary of $79,819, according to the Government of Japan.
Large Japanese brands that have recently announced new U.S. investment strategies include Toyota, which pledged $10 billion worth of capital investments over the next five years and SoftBank, which will put $50 billion into U.S. investment strategies that are expected to create 50,000 jobs. “Japanese investments in the U.S. are integral to the American economy,” the Government of Japan notes, “and the country shows no signs of backing down as a key player.”
It’s a Two-Way Street
A fascinating country steeped in history and rich in culture, Japan is known for pursuing the cutting edge of technology while honoring its traditions. A member of the G-7, an important leader in the region, and a close U.S. ally in the defense and security spheres, Japan’s economy has both a large, middle-class consumer base and a world-renowned manufacturing base.
Yasuhiro Yamaguchi, Director of Japanese Trade Services for DB Schenker, credits the two countries’ stable economies and long trading history with making the Japanese-U.S. trade lane a critical link in the world’s global supply chain. Yamaguchi estimates that roughly 8,000 Japanese companies have a presence in the U.S., and says both countries continue to thrive on their positive, two-way trading relationship.
“Despite the uncertainty around tariffs and trade wars, the U.S.-Japan partnership remains strong,” says Yamaguchi
Economic Prosperity
Japan’s economy has been on an upward trend for the last 15 years or so, with some of its strongest exports being vehicles; machinery; electrical equipment; optical, technical, and medical apparatus; and iron and steel. The country shipped over $698 billion (USD) in goods around the globe in 2017, up about 8.3% over the prior year.
Japan’s strong economic status has directly impacted its business base, with many companies now able to invest in other entities—both domestically and abroad. These organizations do a lot of business with overseas trading partners and, as such, have very specific logistics and transportation needs.
“Japanese directors care a lot about the process behind the logistics, and about making sure things are done correctly,” says Yamaguchi, whose team develops standard operating procedures (SOPs) for customers, and then hones those SOPs as the relationship advances. Interested in continuous improvement, Japanese shippers are generally loyal to the logistics providers and freight forwarders that treat them well and manage their business in a professional, consistent manner.
The Japan-Mexico Connection
Having met with dozens of Japanese companies on their own home turfs, Yamaguchi is well versed in the logistics business there, and in the U.S. Before joining Schenker, Inc. Americas he worked for Schenker-Seino Japan, the latter of which is a large trucking company. Today, as head of Schenker’s Japan Competency Center in Chicago, Yamaguchi and his knowledgeable team covers the U.S. and the Americas.
“Here at DB Schenker, we have Japanese staff members in many of our key markets,” says Yamaguchi, who has team members dedicated to the Japan-U.S. trade lane – both in the U.S. and in Japan. DB Schenker’s U.S. customers include exporters of perishables, food, beverages, grain, and agricultural products; with import customers in the automotive, machinery, and electronics sectors, among many other industries.
Yamaguchi, who also works on business development of U.S.-Mexico cross-border land freight, says that a large number of Japanese companies currently have a presence in Mexico, including Honda, Mazda, and Toyota, the latter of which is expected to start up its new plant production by early-2020. “When those Japanese automotive companies decide to invest in the Mexico market, usually the tier one and tier two suppliers follow suit because they have to supply their product to the assembly line,” says Yamaguchi.
“Manufacturers need to be able to quickly and efficiently transport their products for assembly,” he continues, “and we can help make those Japan-Mexico and Japan-U.S. connections easier and more seamless for shippers.”
Solving Shipper Problems
With a seasoned team of logistics experts that include professionals who have close ties to Japan, and who have lived and worked in both countries, DB Schenker is helping to cultivate trade between the U.S. and Japan, the latter of which saw three of its biggest carriers merge into one.
Ocean Network Express Pte. Ltd. (now known as “ONE”) is a joint venture of Kawasaki Kisen Kaisha, Ltd., Mitsui O.S.K. Lines, Ltd., and Nippon Yusen Kabushiki Kaisha, and started its business in April of 2018.
“Since that joint venture started operating, the service level of the vessels between Japan and the U.S. has been reduced,” says Yamaguchi, who sees DB Schenker’s status as a Non-vessel operating common carrier (NVOCC) as a plus for customers who may be dealing with such issues.
“We have more options in terms of finding and working with carriers,” says Yamaguchi, “so importers and exporters are leveraging our service wisely both for their transportation needs and for logistics solutions. It’s a win-win for them.”
