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  • Graduate School of International Management
  • Will the railroad survive?
  • Professor Yoshitaka Fukui
  • Graduate School of International Management
  • Will the railroad survive?
  • Professor Yoshitaka Fukui

The rosy view of railways is nothing more than an illusion

There has been a lot of talk about railways recently, such as the 50th anniversary of the Tokaido Shinkansen, the opening of the Hokuriku Shinkansen, and the start of construction of the Linear Chuo Shinkansen. Furthermore, with growing interest in resource conservation and global environmental protection, there is also growing momentum to reevaluate railways, which are considered to be an energy-efficient "clean means of transportation." The Hokkaido Shinkansen is scheduled to open in the spring of 2016. Furthermore, in January of this year, the government and ruling party officially decided to bring forward the opening of the Hokkaido, Hokuriku, and Kyushu Shinkansen lines.

 

In the second half of the 20th century, when motorization became prominent outside of the United States, railroads were even said to be a "dying relic of the 19th century," but in this century, the future seems to have taken an unexpected turn for the better. Against this backdrop, we have recently been hearing more and more talk about "restoring railroads" and "reviving railroads."

 

However, I believe that this "rosy view of railways" is nothing more than an illusion. As we enter an era of population decline and transportation volume declines, railways will be forced to downsize. I would like them to spend the rest of their lives in peace as the "former land champions" that supported Japan's high economic growth.

 

When considering the future of railways, we must first face the reality that railways are a niche industry. Here, let's consider passenger transportation, which is familiar to everyone, by comparing it with other means of transportation such as cars and airplanes.

 

First of all, in terms of convenience for traveling relatively short distances, trains cannot compete with cars, which can take you from your home or office to your destination. In big cities, people mainly commute by train (and buses) because the costs of alternative means (parking fees, taxi fares, etc.) are too high for the majority of people. That is why commuting by car is the norm in places where land is cheap and parking is (almost) free. Even in big cities, the few people who can afford the cost commute by car instead of train. Even in railway companies, the presidents and other top executives commute in company cars with drivers. Most users do not prefer to use trains. They simply "have no choice but to choose trains" for the "purpose of getting around" and to balance costs.

 

Also, when it comes to speed when traveling long distances, shinkansen trains cannot compete with airplanes. Although it depends on the convenience of access from the airport to the city center, airplanes are the first choice when traveling more than several hundred kilometers that would take more than three hours by train, even in Japan, a country with a large railway network. Currently, the Shinkansen train with the longest distance (1,200 km) and the longest time (5 hours) is the "Nozomi" between Tokyo and Hakata. However, less than 10% of people use the Shinkansen to travel between Tokyo and Hakata. In other words, more than 90% of people use airplanes.

 

Trains are less convenient than cars and faster than airplanes... so for trains to survive, they have no choice but to find a way in the gap between cars and airplanes. However, just because it's a gap doesn't mean it's small. Even if it's an unavoidable choice for users, if there are favorable conditions for railway operators, trains' share can become so large that the word "gaps" no longer seems appropriate. And Japan is one of the few countries in the world where these conditions exist in the field of passenger rail transport.

The "Railway Kingdom of Japan" is supported by the Tokyo metropolitan area, the Kansai region, and the Tokaido Shinkansen.

So what exactly are the "favorable conditions for rail passenger transport" that are unique to Japan?

 

That is "population concentration in big cities." In Japan, in addition to the three major metropolitan areas of Tokyo, Osaka, and Nagoya, there are many other large cities from Sapporo in the north to Fukuoka in the south, and the population is concentrated there. Therefore, for the reasons mentioned above, the majority of the people have no choice but to use trains for daily transportation (especially commuting), whether they like it or not.

 

In addition, in Japan, three major cities are connected along a strip of land called the "Tokaido" that is only a few dozen kilometers wide and 500 kilometers long, forming an industrial and population cluster unlike any other in the world. This creates a large demand for medium- to long-distance intercity travel that cannot be transported by airplanes, which have limited capacity.

 

Given this background, Japan has three rail transport markets that boast some of the world's largest freight volumes: transport within the Tokyo and Kansai metropolitan areas, and intercity transport using the Tokaido Shinkansen. Let's take a look at the freight volumes using data.

 

An important indicator of the volume of transportation carried by a mode of transportation is "passenger-kilometers." This refers to the cumulative total of the number of passengers carried (people) multiplied by the distance (kilometers) traveled by each person. Japan's "railway passenger-kilometers" currently totals approximately 400 billion passenger-kilometers per year (of which JR travels approximately 250 billion passenger-kilometers, and non-JR travel approximately 150 billion passenger-kilometers).

 

Figure 1 shows Japan's total railway transportation volume (billion passenger-kilometers) and the share of commercial kilometers in fiscal 2012, broken down into JR's three major markets (Tokyo metropolitan area, Kansai area, and Tokaido Shinkansen), 15 major private railways, subways, and "others." This shows that five categories, which account for only a quarter of the total in terms of commercial kilometers, account for roughly 80% of transportation volume (Tokyo Metro, which is often included among the major private railways, is counted as "subway." Tokyo Metro accounts for half of subway transportation volume).

Next, let's look at it from the perspective of "transport density," an indicator of transport efficiency. Transport density is a value that indicates the number of passengers who pass through on trains running on a line, and is an indicator that can be said to be "the key to understanding the business viability of railways." A "transport density of 1,000 people per day" means that the line has an average of 1,000 passengers on both inbound and outbound trains per day.

 

Figure 2 is a graph comparing transport density by market category. This shows how Japan's passenger railway demand is concentrated in the Tokyo metropolitan area, the Kansai region, and Tokaido. Conversely, in areas with less dense population, transport volume and transport density are low, with the transport density of "other," which includes all Shinkansen lines except for Tokaido and accounts for three-quarters of Japan's railway operating kilometers, remaining at around 10,000 passengers.

Needless to say, the greatest characteristic of railways is "mass transportation." Therefore, in a society with a declining population, the niche where railways can play an active role will become smaller and smaller. Even in places where railways have been able to demonstrate their characteristics up until now, there will certainly be an increasing number of cases where it will be socially preferable for them to withdraw and leave it to other means of transportation.

 

Auditor Ryohei Kakumoto, who was involved in the construction of the Tokaido Shinkansen and was one of the highest-ranking executives of Japanese National Railways in the 1960s, stated the following in his book "Railways and Automobiles," published in 1968:

 

"Because the automobile appeared at a stage when railroads had already become widespread, the mission of railroads today is no longer to be responsible for all land transportation, but is limited to transportation that is less costly than automobiles, or transportation for which railroads can provide a much better service than automobiles. By limiting railroad lines to this area, we can actually enrich the content of railroad transportation and make it more useful to the lives of the people. Attachment to the old railroads of the past must be wiped away now."

 

Now is the time for railway operators to make ruthless choices and focus.

We should maintain necessary public transportation, but it doesn't have to be rail.

In the previous section, I mentioned the need for "selection and concentration," but I do not intend to say, "We should abolish all routes that are not cost-effective." For example, it goes without saying that there are cases where transportation services must be provided even if tax money is used, such as transportation for junior and senior high school students to commute to school.

 

In the past, when discussing converting unprofitable local lines to buses, the problems that were always pointed out were "speed" and "punctuality." A promising idea to solve these problems is BRT (Bus Rapid Transit).

 

BRT is a bus transportation system that runs on dedicated roads and lanes. It combines the flexibility of buses with the convenience of urban railways, and has the advantage of being inexpensive to build, so it is a system that has been put into practical use around the world. In Japan, JR East has introduced it as an alternative to the restoration of the Kesennuma Line, which was damaged by the tsunami in the Great East Japan Earthquake, so many people may be familiar with it. Since it uses former railway tracks as a dedicated road for buses, there is no congestion, and it is possible to ensure high punctuality and high speed. Of course, it can also run on public roads off the dedicated roads, so it is possible to reach places with many users, such as schools and hospitals.

 

In this way, if we can provide the same or even better service at a lower cost, there is no reason to stick to rail, and we shouldn't. In the future, we should first consider converting other low-use routes (with a transport density of less than 2,000 people per day) to regular bus transport or BRT, not just in disaster-stricken areas. I believe this is the ideal form for revitalizing regional transport in the 21st century.

 

There are various demands in the world that are necessary from the perspective of the public good. However, the human and material resources available to us are limited. It is very difficult to decide which demands to prioritize and how to realize them. However, we cannot escape from "efficiency." Even if we ignore efficiency, this "ruthless beauty" will not leave us alone. Revenge in the form of "a decline in living standards due to inefficiency" is just waiting for us.

 

Once the tracks are laid, it is difficult to make changes to railways, and even changing the track width is not easy. In other words, it lacks flexibility. In contrast, it is much easier to change the equipment and routes of cars and airplanes, and they have a high ability to respond to fluctuations in demand.

 

Furthermore, compared to cars and airplanes, the maintenance costs of trains are enormous. Cars and airplanes are common in developing countries. However, because maintenance of trains is so difficult, the condition of facilities in developing countries, including those built with technical cooperation from Japan, often deteriorates and does not fully function as intended.

 

In the future, the basis for passenger transport should be that "railroads will only cover areas that cannot be covered by automobiles and airplanes." If passenger transport services must be provided even at the expense of tax money, then the public interest lies in "transportation," not in a specific means of transport.

 

Rather than being misled by the illusion of a railway revival and placing excessive expectations on it, perhaps it is time to pay tribute to the former "king of the land," free the railways, which have become a niche industry, from the "curse of public service," and allow them to live out the rest of their lives in peace.

 

(Published in 2015)

Related articles

  • "Can Railways Survive?" by Yoshitaka Fukui (Chuo Keizaisha: 2012)
  • "The Story of the Shinkansen Development" by Ryohei Kakumoto (paperback) (Chuokoron-Shinsha: 2014)
  • "Linear Shinkansen: The Truth About This Huge Project" by Reijiro Hashiyama (paperback) (Shueisha: 2014)

Study this topic at Aoyama Gakuin University

Graduate School of International Management

  • Graduate School of International Management
  • Professor Yoshitaka Fukui
  • Affiliation: Graduate Graduate School of International Management Aoyama Gakuin University, Department of International Management Science
    Subjects: Financial Analysis (Professional Graduate School), Macroeconomic Data Analysis (Professional Graduate School), Financial Accounting (Professional Graduate School), Statistical Method I (Professional Graduate School) (Graduate School)
    Areas of expertise and related fields: Economic analysis of accounting systems and information, Law and economics, Evolution and social behavior, Corporate governance, International politics
Link to researcher information
  • Graduate School of International Management
  • Professor Yoshitaka Fukui
  • Affiliation: Graduate Graduate School of International Management Aoyama Gakuin University, Department of International Management Science
    Subjects: Financial Analysis (Professional Graduate School), Macroeconomic Data Analysis (Professional Graduate School), Financial Accounting (Professional Graduate School), Statistical Method I (Professional Graduate School) (Graduate School)
    Areas of expertise and related fields: Economic analysis of accounting systems and information, Law and economics, Evolution and social behavior, Corporate governance, International politics
  • Link to researcher information

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