Uzbek entrepreneur brings innovation to Japan’s trucking industry

J-STORIES - Driven by a vision to transform Japan's logistical landscape, a young entrepreneur from Uzbekistan is looking to reshape how goods are delivered across Japan. Since arriving in Japan in 2019 to study at Tokyo International University, Shakhboz Khayrilloev has learned to navigate the entrepreneurial landscape of Japan, co-founding and leading Logistical as CEO. With projections indicating that 35% of all cargo could go undelivered by 2030 due to limits on working hours for truck drivers, Khayrilloev aims to bring innovative solutions to tackle this critical issue head-on.

After a short venture in e-commerce, Khayrilloev founded a company involved in the logistics of exporting dried fruits from Uzbekistan. His entrepreneurial skills were further developed through his participation in the Japan Venture Academy, where he and his fellow members conceived the idea of connecting freelance drivers to help non-Japanese speaking residents with their home-moving needs. After realizing this market was too niche, he developed a new concept to tackle the widespread issue of trucking logistics. 

Khayrilloev identified a surprising gap in the trucking industry of Asia, where nearly 40% of trucks travel empty, according to a 2011 study by The Organisation for Economic Co-operation and Development. Similarly, in the U.S., an estimated 36% of trucks travel empty; in Europe, this figure is 27%.

A truck traveling without cargo, referred to as "empty miles," leads to wasted fuel, increased emissions, and operational inefficiencies. The source of the problem primarily lies in mismatched logistics and inefficiencies in route planning. Companies often struggle to find timely return loads or match shipments with available carriers. 

Logistical is testing a "joint delivery" system that matches companies with overlapping routes to share truck space, reducing both costs and carbon emissions. Khayrilloev utilizes AI to speed up processes like matchmaking and report filing which have been done in the past with human labor. Instead of individually matching each company by hand, AI is being developed to match companies instantaneously based on a variety of factors, including destination, product, and the amount of space needed. "Our goal is to optimize operations," says Khayrilloev, to “boost both efficiency and sustainability in Japan’s delivery operations.” 

Khayrilloev has been interested in living abroad since his adolescence. Despite going to high school in Germany, Khayrilloev did not feel he fit into German culture. His teacher, who had lived in Tokyo for three years, introduced him to the idea of studying in Japan. “He used to tell me a lot about Japan and its culture. With this and my own research, I started to realize Japanese culture was close to that of Uzbekistan.” After moving here for university, Khayrilloev realized "our cultures are very similar in many senses." and he felt "more comfortable, more myself" than he did while studying in Germany. This is why he "really, really, really wanted to start a business in Japan."

At the beginning of his time in Japan, Khayrilloev worked at Trusted Corporation as an intern and several part-time jobs, which familiarized him with the Japanese work environment. Eventually, he realized he "was not really interested in working for someone else" and decided to start his own project. 

Khayrilloev describes the "2024 problem" as one of the main factors behind focusing on the logistics of the trucking industry. The 2024 problem in Japan refers to a regulation passed in April of 2024 that limits truck drivers' work time to 960 hours per year, a response to the widespread overwork of laborers in the industry. In comparison, the European Union allows drivers up to 56 hours per week, or 2,900 hours per year. In the U.S., this number can reach 3,600 hours per year if the maximum hours are worked per week. At a minimum, Japanese truck drivers are limited to working 1,940 hours less per year. 

The new regulation exacerbates an already existing deficit of drivers. Due to this labor shortage, the burden on logistics companies to optimize basic processes has grown significantly. It is predicted that if this trend continues by 2030, 35% of cargo will go undelivered per year. "Thirty-five percent is a huge number. ... It's going to be a huge issue for the whole economy," says Khayrilloev.

The regulation does have benefits. Khayrilloev praised the bill for ensuring that these laborers are not exploited: "What amazed me is that truck drivers, on average, worked from 16 to 18 hours per day. Not per week. Per day. If I work 13 hours, I'm already super tired." It also reduces the risk of accidents due to fatigue. Logistical’s innovative approach to efficiency would eliminate the need for long hours by reducing the amount of labor needed for deliveries.

Logistical focuses on a concept known as "joint delivery. A far more efficient trucking system can be created by creating a structure that pairs deliveries going to the same area together. Say a company only needs 40% of the total truck space; instead of paying for the whole truck, it can split the other 60% with another company. By using AI matchmaking to efficiently group companies traveling to the same areas with similar products, Khayrilloev wants to eliminate these “empty miles”. This process will solve several problems: truck drivers can work fewer hours, companies can split trucking fees to save money, and carbon emissions would be reduced significantly.

Logistical plans to use AI make old-school logistic practices more efficient. Many trucking companies still require workers to complete reports by hand and submit them daily. Instead, an artificial intelligence system could streamline the process significantly, saving both time and energy. Although Logistical was founded in 2024 and is still in the service testing phase, “from our first test companies, we already see they can better visualize their whole process and manage trucking more efficiently,” says Khayrilloev.

Navigating Japan's business culture as a foreigner comes with its challenges. "To have a proper business conversation with people, you need to ask quality questions," Khayrilloev said, acknowledging the connection that language has to relationship-building. He figured out early on that learning Japanese was not only about conversation, "when I have a business meeting, I not only talk about business but also talk a little bit about personal life. I try to build some kind of a personal relationship, ask his feelings about specific topics, creating a friendly relationship. I have not experienced this type of relationship in business much outside of Japan." 

Khayrilloev is proficient in four languages: English, Japanese, Russian, and Uzbek. His linguistic skills have helped him create meaningful partnerships with mentors and colleagues from various backgrounds. After his participation at Japan Venture Academy, Shibuya Startup Support decided to give Logistical the opportunity to grow by providing office space and extra support.

Khayrilloev also prides himself on running one of the few foreign startups in Japan based in logistics. Having experienced many cultures, he finds his ability to connect with people from around the world helpful in growing Logistical. “I think one of the main differences is that we're able to think globally,” says Khayrilloev.

While Khayrilloev is looking to expand Logistical globally, his current focus remains on Japan, where he sees room for growth in the industry. His goal is to "increase efficiency and help Japanese society" tackle issues in logistics, positioning Logistical as an up-and-coming force in the market.

"If there are people reading who have a similar vision or want to cooperate, collaborate, talk about logistics, or just exchange ideas, I am a person who really likes to talk to people. So if you are interested, reach out to me," adds Khayrilloev.

Written by Lucas Maltzman

Editing by Isshiki Takanori, Mark Goldsmith

Top Photo by J-Stories (Anita De Michele)

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 Click here for the Japanese version of the article.