Matsuura City, Dentsu Kyushu Inc., and NEXT DELIVERY Tackle the "Island Shopping Refugee" Problem with New Smart Logistics (Part 1)

Accelerating population decline and aging have made rural depopulation a serious social issue. Among these areas, remote islands face particular challenges. Beyond population loss and labor shortages, climate change impacts disrupt ferry services, making it difficult to procure food and daily necessities. This creates so-called "shopping refugees," a major problem. Matsuura City in Nagasaki Prefecture, which has inhabited islands, also faced these issues.

In 2024, to address these social challenges, Matsuura City signed a collaborative agreement with four companies, includingDentsu Kyushu Inc. and AeroNext Inc., to utilize next-generation advanced technologies, including drones, for regional revitalization. Building upon the traditional concept of "smart logistics" that leverages data and IT to streamline logistics, the city began introducing "new smart logistics." This aims to optimize the flow of goods within the local community, further reduce labor requirements, and advance decarbonization. This time, we interviewed Mr. Takeshi Yamaguchi from Matsuura City's Policy Planning Division, Mr. Shogo Furuhashi from NEXT DELIVERY Co., Ltd. (a subsidiary of Aeronext), and Mr. Kentaro Fuji from Dentsu Kyushu Inc.'s Regional Value Co-creation Bureau, all involved in this initiative. In Part 1, we explore the background of the initiative and the roles each party plays.

Building New Smart Logistics with Drones to Save Depopulated Areas

Q. Please explain your respective roles in this initiative.

Furuhashi: NEXT DELIVERY, whose parent company AeroNext develops drone technology, is engaged in a new smart logistics business that utilizes drones to create the optimal mix of land and air transport. This initiative aims to streamline last-mile regional logistics and solve regional and societal challenges. Our role in this project is to extract the proven advantages of this new smart logistics system, developed through deployments in 10 municipalities nationwide and pilot tests in over 50 others, and to determine how to apply these to solve Matsuura City's specific challenges.

Yamaguchi: Matsuura City in Nagasaki Prefecture is a typical depopulated municipality encompassing three inhabited islands (Kuroshima, Tobishima, Aoshima) and mountainous/rural areas. The city particularly identified "addressing shopping difficulties" as a key challenge. Islands present distinct challenges from mountainous/rural areas, and we were exploring solutions when this project launched. We expect it to contribute to solving these issues. While depopulated areas vary across Japan, each with its own circumstances, we recognize the city's role as providing resources unique to Matsuura City and supporting the resolution of challenges that arise as the project progresses.

Fuji: Currently, dentsu Japan (the domestic Dentsu Group) is expanding into the DX domain and, under the banner of IGP (Integrated Growth Partner), is working to support the growth of companies and local communities from a broader perspective that extends beyond advertising and marketing. Based on this concept, Dentsu Kyushu Inc. established the Regional Value Co-creation Bureau in January 2023. This Regional Value Co-creation Bureau is participating in this project to co-create new value with the people of Matsuura City. Its primary roles are serving as the liaison with the city and handling overall project planning and management.

Beyond building a drone delivery business model, we aim to create new value for the region

Q. Please explain the specific details of the "Comprehensive Partnership Agreement on New Smart Logistics" signed on February 27, 2024.

Yamaguchi: This comprehensive partnership agreement was signed between Matsuura City, Seino Holdings Co., Ltd., Aeronext, KDDI Smart Drone Co., Ltd., and Dentsu Kyushu Inc. Its purpose is to build a new logistics business model by utilizing next-generation advanced technologies, including a drone delivery demonstration project within the city, to address regional challenges such as depopulation that Matsuura City aims to overcome. The specific areas of collaboration are fourfold: "1. Promotion of agriculture, tourism, industry, and the economy through the use of next-generation advanced technologies, including drones," "2. Regional employment, human resource education, talent development, and industrial infrastructure development," "3. Ensuring sustainable regional transportation and logistics, and creating a livable environment," and "4. Contributing to regional disaster prevention and developing new social infrastructure."

Matsuura City, a depopulated municipality, faces challenges stemming from its declining population, including an aging population, increasing vacant houses, fewer shops and medical facilities, and reduced public transportation convenience. Maintaining the living standards of local residents is therefore a major challenge for the city. This partnership agreement is expected to embody initiatives that can address these challenges faced by Matsuura City through the utilization of next-generation advanced technologies.

Q. What are your expectations for this collaboration with Dentsu Kyushu Inc.?

Furuhashi: As an advertising agency, Dentsu Inc. possesses diverse consumer data and approaches its work from multiple consumer perspectives. As we advance the new smart logistics initiative, we expect that involving a company like Dentsu Kyushu Inc., which engages in such broad-based activities, will generate new ideas. Furthermore, we aim to collaborate not only on new smart logistics but also on solving regional challenges, revitalizing the area, and expanding projects like this one across all of Kyushu.

Fuji: While this project focuses on logistics efficiency from the business perspective (consolidating goods at intermediate hubs for joint delivery via light vans and drone delivery) and shopping support via drone delivery from the consumer perspective, these alone won't solve all of Matsuura City's regional challenges. I believe our participation holds significance beyond just drone utilization. Specifically, we can leverage our expertise in public relations to help disseminate new initiatives and services like this one to local residents and to collaborate with regional businesses as we expand these services. Furthermore, as Mr. Furuhashi mentioned, expanding such projects across all of Kyushu is an area we have traditionally handled, and we are confident we can contribute our support.

Expectations for Utilizing Drone Delivery Between Remote Islands as a Regional Disaster Prevention Measure

Q. What unique challenges does the Matsuura City region present for this project?

Furuhashi: Regarding drones, the unique aspect for Matsuura City is undoubtedly its status as an island. The areas we've worked with previously were primarily mountainous or flat regions, so this drone delivery between islands is a first for us as well. Places inaccessible by land, reachable only by ferry, represent areas where drones offer the highest utility.

Additionally, the region's maritime location means significant exposure to wind. In mountainous drone delivery projects, we've encountered difficulties like drones being hard to fly in wind-swept valleys and GPS signal challenges in mountain-enclosed areas. This time, we anticipate new challenges from external factors like sea winds affecting drone flight. We aim to thoroughly establish a model for inter-island drone delivery in Matsuura City, including addressing whatever issues arise.

Yamaguchi: While ferries exist as a means of transportation, small islands often have limited schedules and cancellations. This means there's a real concern about becoming isolated during emergencies like disasters. Therefore, the city hopes drones can be utilized not only for shopping support but also to prevent logistics disruptions during such crises. Indeed, NEXT DELIVERY has already delivered supplies by drone to isolated communities during the 2024 Noto Peninsula earthquake and summer torrential rains. We believe such disaster prevention applications are highly effective.

This initiative began with the aim of utilizing next-generation advanced technologies, including drones, to solve regional challenges faced by Matsuura City, Nagasaki Prefecture—a depopulated municipality with remote islands. Its vision extends beyond supporting shopping-disadvantaged residents; it seeks to foster regional agriculture, tourism, industry, and economic growth, create employment, and develop human resources. Furthermore, it aspires to expand these outcomes across all of Kyushu. In the second part, we will hear about the results and challenges of the actual proof-of-concept experiment involving drone delivery between remote islands.