Japan Railway & Transport Review No. 49 (pp.51–54)

Feature: 20 Years After JNR Privatization Vol. 2
Celebrating 20 Years of JR Freight

Japan Freight Railway Company
Chairman, Naohiko Ito


It is 20 years since Japan Freight Railway Company was established in 1987—the time has really flown by!
From the late 1970s, JNR’s freight division faced a series of setbacks and the system was overhauled at the February 1984 timetable revisions when JNR abolished the yard system nationwide and started operating direct freight trains. Some critics even adopted the bold stance that rail freight was unnecessary because goods could be carried more efficiently by other modes. Faced with these circumstances, the Supervisory Committee for JNR Reconstruction published a paper entitled A Suggestion for Reforming JNR in which they suggested that rail freight in Japan should be organized as an integrated independent business, making full use of rail’s advantages in carrying certain freight categories. However, the specific measures were left up to the government and JNR.
As a result, JR Freight was established to ensure profitability based on a framework whereby the six newly formed JR passenger companies would take ownership of lines and infrastructure and JR Freight would run freight services over these lines by paying the passenger companies a track usage fee based on incremental costs.

20-year History of JR Freight

In the first 6 years of operations (1987–92), JR Freight posted annual profits due in part to concerted efforts to transition freight transport from road to rail and also due to the buoyant Japanese economy.
Unfortunately, the company fell into the red for the next 8 years (1993–2000) caused by a significant drop in freight volumes resulting from the collapse of the ‘bubble economy’ and transport deregulation allowing truck operators to enter the market more easily. This lacklustre performance was despite concerted efforts by management and employees to streamline operations, including substantial personnel reductions. The 1995 Great Hanshin Earthquake severed operations on the Tokaido main line for about 100 days, which seriously affected JR Freight operations.
The company returned to the black in FY2001 where it managed to remain until FY2006 although profitability was almost negligible (Table 1). During this time, the company has made tremendous efforts to diversify it business operations; in addition to freight transport, we have rapidly developed related businesses, such as leasing buildings used as distribution facilities to make optimum use of land acquired by the company and thereby stabilize our platform.
Looking back over our 20-year history in rail operations, we have broken away from the confines of the JNR era and have successfully established a highly efficient transportation system. With the exception of crude oil, which is suited to bulk wagon transport, we have created a shift from freight wagons to containers (Table 2).
At the same time, we have implemented a range of measures to tailor containerized transport to the needs of shippers. First, JR Freight has increased speeds to expand the next-day delivery region. In addition to achievements such as the completion of the Seikan Tunnel between Honshu and Hokkaido, and the Honshu–Shikoku bridges, we have introduced new containers and inverter locomotives using technological breakthroughs to run at higher speeds. We have also improved container capacity by enhancing infrastructure thanks to government support for increasing the length of freight trains on the Tokaido and San’yo main lines, and by introducing the Effective & Speedy Container Handling System (E&S System) incorporating loading and unloading lines at 27 stations. We have also installed top lifters to handle larger containers with loads equivalent to a 10-tonne truck, levelled out transportation demand to make best use of capacity, and streamlined forklift truck operations. Furthermore, we have introduced the IT-FRENS & TRACE system for collecting various basic data at stations to use resources more efficiently. Nevertheless, there are still many more issues to solve, such as replacing the large number of old locomotives still in operation with new models as soon as possible.

Table 1 : Revenue
Table 2 : Freight Carried
Photo : Top lifter for E&S System and larger containers

Memorable Events

I would like to touch upon three especially memorable events during my time as President of JR Freight. The first was the 31 March 2000 eruption of Mt. Usu (732 m) in Hokkaido, which prevented normal services on the Muroran Line—the main rail artery between Honshu and Hokkaido—for 71 days. Of course goods, had to be carried somehow between Honshu and Hokkaido and I remember vividly how we took the initiative in using every conceivable mode to ensure freight reached its destination, including diverting trains via the Hakodate Line, carrying freight by truck instead of train and also using ships for transportation. The unusually large number of natural disasters that have occurred in Japan recently reaffirms the importance of formulating plans for freight transport at such times.
The second event was the problems associated with projected shinkansen lines and conventional non-shinkansen lines running parallel to them. With the extension of the Tohoku Shinkansen to Hachinohe, an adjustment system was introduced whereby the increase in track fees paid by JR Freight to JR East for using the tracks between Morioka and Hachinohe is reimbursed to JR Freight from the shinkansen track usage fees paid by JR East to Japan Railway Construction Public Corporation (JRCC). It took the government and the Ministry of Land, Infrastructure and Transport 10 years to implement this system, which constitutes a basic rule on how joint public–private ventures will acquire ownership of conventional lines running parallel to new future shinkansen lines. I well remember the day when this was finally achieved because it was an important topic that could have seriously impacted our company’s future.
The third event is the transfer of the facilities at Umeda Station to Suita Freight Terminal and Kudara Station. This project will complete the infrastructure reforms advocated by the JNR restructuring and it is 20 years since I first became involved as head of the Kansai branch office when JR Freight was established. Although the project has seen many twists and turns, I am delighted that construction of the modern Suita Freight Terminal is now underway, because it will strengthen our partnerships with the freight shipping community.

Future Outlook

The Japanese distribution industry is changing rapidly with total freight carried continuing to fall. The number of trucking operators has increased by 50% to some 60,000 companies as a result of deregulation, meaning that the current oversupply is unlikely to change.
The concept of supply chain management has become widespread in the industry, with customer requirements becoming increasingly stricter. While competition will continue to intensify, the modal shift towards rail is gaining momentum as expectations rise. There are several reasons behind this shift. Various initiatives are being taken to reduce environmental burdens in line with the Kyoto Protocol agreements and efforts are being stepped up in the second year after the Revised Energy Saving Law was promulgated. Other factors include skyrocketing oil prices and labour shortages due to an aging workforce and declining birth rate.
Companies are incorporating freight transport by rail into their distribution systems and some are using trains such as Super Rail Cargo, Super Green Shuttle Midori and Long Path Express in both directions for the first time. We must use this foothold to forge ahead and develop systems that will gain customers’ trust. In FY2007, the last year of our New Stream 2007 medium-term management plan, we are redoubling our efforts while realizing that safety takes priority over everything else. We also plan to implement concrete measures to further enhance reliability and thereby minimize any possibility of disruption and inconvenience to customers.
Capital investment to ensure service reliability is a matter of the highest importance that we are urgently tackling. We have symbolically mentioned the term ‘21st Century’ in reference to the new fundamental transportation system and we want to redefine rail freight transportation by implementing structural reforms quickly to minimize locomotive changes and to dispatch direct unit freight trains for high-speed goods transport.
Needless to say, our ultimate goal is full-scale privatization but this has not been achieved yet. In FY2006, we received government support as an extension to the special measures related to transfer of the fixed assets tax. We have also received approval from the JR passenger companies to continue using the basic framework for rules for track usage fees. Going forward, we will fulfil our role in the modal shift to freight transport by rail and thereby bring freight rail operations out of the red and establish a solid base to achieve full privatization.
Photo : Super Rail Cargo—world’s first high-speed container train
Photo : Super Green Shuttle Midori entered service in March 2006
This article, including illustrations, was originally published in Japanese in the June 2007 edition of JR Gazette published by Kotsu Shimbunsha.

JR Freight Chronology

17 Sep - Started JR F-Tourist operation
1 Oct - Introduced first 30-ft containers
8 Oct -

Started rental storage space service at Sumidagawa Station


13 Mar - Started operations on Tsugaru, Kaikyo and Esashi lines
      Started Super Liner high-speed container train
10 Apr - Started Operations on Honshi-Bisan Line
22 Jul - Sold Omoshiro-Land on site of former Shiodome Freight Yard
1 Oct - Started Japan Sea Coastal Liner service between Sapporo Freight Terminal and Fukuoka Freight Terminal
13 Dec - Train derailed on Hakodate Line

11 Mar - Series EF66 DC electric locomotive exceeded 100 units
26 Apr - Started operation of special international maritime container train between Tokyo Freight Terminal and Honmoku
28 Apr - Completed freight handling and storage facility at Shin-Moriyama Station
24 May - Started Slide Van System (SVS) between Sagami Kamotsu and Tomakomai
22 Jun - Started special piggy-back train service between Sumidagawa and Nuttari
1 Jul - Introduced new freight car information system
1 Oct - Started operations on Kitakami Line between Kitakami and Yokote
2 Nov - Started Mazda train for transporting automobile components between Nishi-Hamamatsu and Higashi-Hiroshima

10 Mar - Opened Niigata Freight Terminal and Toyama Freight Station
      Completed improvements at Umekoji Station
Started 26 - wagon trains capable of hauling 1300 tonnes between Tokyo Freight Terminal and Umeda
15 Mar - Opened Nishi-Okayama Station
8 Nov -

Started CI project F21 Plan


25 Mar - Completed F-Plaza first building at Kajigaya Freight Terminal
11 Jun - Formulated F21 Plan corporate philosophy
31 Jul - Started operations on Nippo Line between Hyugashi and Sadowara
14 Oct - Started car-pack vehicle container for transporting cars between Utsunomiya Freight Terminal and Kanda-ko

3 Mar - Started oil tanker piggy-back service from Honmoku to Niiza Freight Terminal
1 Jul - Opened F-Plaza Tokyo (Building B)
      Introduced Series EF200 DC electric locomotive


10 Mar - Introduced DF200 electric-diesel locomotive
23 Jun - Started work to upgrade freight capacity on Tokaido main line


3 Jan - Started Freight Information Network System (FRENS)
21 Mar - Opened Himeji Freight Yard
17 Jul - Opened Sea Train facility at Nagoya Port
16 Nov - Opened Central Training Centre for locomotive drivers
18 Nov - Announced Freight 21 medium-term management plan

6 Mar - Started car-rack system between Nagoya Freight Terminal and Niigata Freight Terminal
13 Mar - Started records management service
15 Jul - Opened Sea Train Land amusement park at Nagoya Port
2 Oct - Started large-scale transportation of maritime containers between Tokyo Freight Terminal/Honmoku to Utsunomiya Freight Terminal
6 Oct - Started Clean Kawasaki train carrying domestic garbage between Kajigaya Freight Terminal and Suehirocho

23 Oct - Launched satellite-based train tracking system
21 Nov - Announced New Freight 21 medium-term management plan

23 Jun - Committee reached consensus for resolving fundamental problems to achieve full-scale privatization of JR Freight
5 Dec - Started EF210 DC electric locomotive ECO-POWER Momotaro service


1 Feb - Opened Mets Tabata Hotel
2 Mar - Completed waste processing plant at Tokyo Freight Terminal
30 Mar - Completed electrification work for Inazawa Line (Inazawa–Nagoya Freight Terminal)
6 Jul - Established JR Freight Research Centre
25 Dec - Designated Suehiro Bridge at former Yokkaichi Port station as important cultural property


10 Mar - Closed Iidamachi Station
26 Apr - Started swap-body transportation between Tokyo Freight Terminal and Fukuoka Freight Terminal
31 May - Moved into new headquarters in Iidabashi, Chiyoda-ku, Tokyo
28 Jun - Transferred Iidamachi Paper Distribution Centre facilities to Niiza Freight Terminal and Sumidagawa Station
16 Sep - Started short-distance transportation of maritime containers between Yokohama Port and Tokyo Freight Terminal

1 Feb - Completed improvements at Hitachi Freight Yard
11 Mar - Started EH 500 AC/DC electric locomotive ECO-POWER Kintaro service
15 Mar - Started rail transport of LNG between Niigata Freight Terminal and Kanazawa
1 Apr - Introduced container auto-scan number system
19 Jun - Opened you me town Hakata commercial complex on site of former Hakata Port Station
16 Aug - Opened Takamatsu Freight Terminal
10 Oct - Established Hanyu Off-rail Station
2 Dec - Started freight services between Nishi-Funabashi and Chiba on Musashino Line and Minami-Nagareyama and Nishi-Funabashi on Keiyo Line

22 Jan - Completed improvements at Hachinohe Freight Yard
7 May - Completed improvements at Ajikawaguchi Station
1 Jun - Started safety medium-term plan
20 Jun - Completed EH200 DC electric locomotive ECO-POWER Blue Thunder
13 Sep - Announced summary of plan to build Maibara Freight Terminal
19 Oct - Completed improvements at Tsuchiura Station
1 Dec - Started operations of Taki 1000 Series tanker wagons at 95 km/h between Sendaikitako Freight Terminal and Morioka Freight Terminal
12 Dec - Completed EF510 AC/DC electric locomotive ECO-POWER Red Thunder
15 Dec - Opened Tenjin Yunohana natural hot spring public baths in Fukuoka

1 Mar - Started container quality information system
23 Mar - Opened Kitakyushu Freight Terminal
25 Mar - Completed improvements at Kumamoto Station
1 Apr - Launched New Challenge 21 medium-term management plan
1 Dec - Started operations at Takaoka Freight Station

27 Mar - Opened I-GARDEN AIR on site of former Iidamachi Freight Station
12 Jun - Opened Kanazawa Freight Terminal
1 Dec - Opened Kobe Freight Terminal


13 Jan - Started IT-FRENS & TRACE system (full-scale operation started in October 2005)
13 Mar - Started M250 Super Rail Cargo high-speed container train service between Tokyo Freight Terminal and Ajikawaguchi
      Opened Kagoshima Freight Terminal
9 Nov - Started rail transportation of LNG between Himeji Freight Terminal and Toyama Freight Terminal



1 Apr - Launched New Stream 2007 medium-term management plan
2 Jun - Established freight car technical training centre
7 Sep - Opened Kariya Off-rail Station
10 Dec - Started Super Oil Express operation between Chiba Freight Yard and Koriyama


10 Jan - Discontinued container freight labels
10 Feb - Signed agreement to start construction of Suita Freight Terminal
16 Mar - Issued first environmental and social report
18 Mar - Started Super Green Shuttle Midori service between Tokyo Freight Terminal and Ajikawaguchi
    - Started Sea & Rail service between Japan and China in conjunction with COSCO
23 Mar - Opened Tosu Freight Terminal
1 Apr - Changed name of all container handling centres to Off-rail Station
12 Sep - Signed memorandum with Korea Railroad for Rail & Sea & Rail service between Japan and South Korea
15 Nov - Started Long Path Express service for transporting automobile components between Nagoya-Minami and Morioka Freight Terminal
      Launched mobile phone transport information service


*Compiled by Kotsu Shimbunsha, based on company directory and Kotsu Shimbun