Yamato Transport Co. Ltd. Business Information, Profile, and History

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History of Yamato Transport Co. Ltd.

Yamato Transport Co. Ltd. is the founder of the private parcel delivery service industry in Japan, and the largest player in the market today. The company delivers approximately 900 million parcels each year. Links with United Parcel Service allow Yamato to deliver in more than 200 countries. A strong menu of domestic services includes home moving, delivery of refrigerated goods, magazine and catalog delivery, roundtrip delivery service, and B2B (business-to-business) and B2C (business-to-consumer) logistics services. The company also operates a virtual mall, handling the shipping and logistics needs of its retail "tenants."

Early 20th Century: Tokyo's First Courier Service

Yamato was founded in 1919 in the Chuo ward of Tokyo, although it was not incorporated as a company until ten years later. The company's founder was a young entrepreneur, Koshin Kogura, who began with ¥100,000 in capital and four new trucks. The establishment of the company came at a time when Tokyo and the rest of Japan, to a lesser extent, were rapidly building the transport and industrial infrastructure necessary to sustain Japan's growing economic power. Kogura's business, delivering business documents and parcels throughout the Tokyo area, boomed. It was, in effect, the city's first courier service.

By 1923 the range of delivery was extended to the adjacent city of Yokohama, and in the same year Yamato was contracted by Tokyo's most prestigious department store, Mitsukoshi, to deliver purchases to customers. Mitsukoshi generally catered to upper-class clientele and the items to be delivered were usually expensive Western imported goods. Yamato obtained its second prestigious client in 1925 when it was appointed by the Imperial household as its official courier and delivery service. The ministry of communications also used Yamato for the speedy delivery of important documents.

By 1929, with Kogura as its first president, the Yamato Transport Co. Ltd. was officially incorporated. A regular Tokyo to Yokohama delivery service was initiated, running several times a day. Customers could rely on Yamato, as opposed to the postal service, for swift delivery of mail within the Tokyo-Yokohama area. In the 1930s Yamato concentrated on expanding its network in the city of Tokyo and surrounding suburbs, and by 1940 claimed that it could deliver anywhere within the Kanto region within one day. Yamato bought a controlling interest in Kawase Cars Co. Ltd., a Tokyo-based operator of taxis and rental cars, to add to its network in the city. This was followed by the purchase of Sanwa Transport Co. Ltd., a competitor in the courier business, in 1944.

Mid-20th Century: Overseas Deliveries

Like many essential infrastructure-related businesses in wartime Japan, Yamato was forced by the military government to aid in the war effort. This in effect meant that the company's resources were directed mainly at supplying goods for military use. The company played a role in the military's communication network within the city of Tokyo.

The U.S. Air Force's bombing campaign during the summer of 1945 left Tokyo in ruins and much of its transport infrastructure in disarray. Yamato was asked by the city authorities and the U.S. occupation forces to assist in the transport of vital goods within the city. Yamato's fleet of trucks was used extensively in the rebuilding of certain areas of Tokyo. Yamato thrived in the immediate postwar period and in 1949 obtained a listing on the Tokyo Stock Exchange for the first time. New branch offices were opened in Tokyo near the main stations of Akihabara and Idabashi in 1950.

In the same year Yamato signed an agreement with the Tokyo municipal authorities that allowed the company to act as clearing agents at customs. By acting as such, Yamato was in a position to deliver parcels efficiently overseas. The company did this in 1951 by setting up a liaison office in Haneda Airport, Tokyo, and forming an agreement with CAT Airlines Co. Ltd. to transport parcels. An overseas freight service from Haneda followed in 1952, allowing Yamato to ship large-scale items for customers. An agreement with the port authorities in nearby Yokohama allowed Yamato to clear goods through customs in this important port. In 1954 Yamato bought a controlling stake in one of its competitors in Tokyo, Teito Transport Co. Ltd. Three years later Yamato made another acquisition, the Tokyo-based Chiyoda Konpo Kogyo Co. Ltd., a packaging and moving company.

Yamato's plans for developing an international delivery service received a boost in 1954 when the International Association of Transport Airlines (IATA) certified the company as fit to handle packages and goods transported by its member aircargo companies. Yamato was now in a position to set up representative offices at all of Japan's major airports. Japan's largest airline, Japan Airlines Co. Ltd., named Yamato as the internal distributor of its cargo goods in 1958, and in 1960 Yamato began handling freight to New York in conjunction with Japan Airlines and others. The now familiar logo, visible on thousands of trucks all over Japan, was introduced in 1957. It depicts a mother cat carrying a kitten between its teeth, symbolizing the careful and efficient handling of goods. Yamato's history of assisting governmental agencies continued in 1965, when the company was involved in helping the post office to ensure that its year-end rush of letters and packages was delivered on time. This was to be repeated in the ensuing years.

Strengthening the Domestic Network in the 1960s

During this period, Yamato was increasingly expanding its main business--the delivery of parcels within Japan. One of the goals of the company, with founder Kogura still at the helm, was to develop the capacity to deliver goods nationwide. This was achieved by the establishment of subsidiaries throughout Japan and by strategic alliances and acquisitions of regional delivery companies.

In 1967 Yamato took advantage of its growing network by diversifying into the travel business and offering package tours. Due to the increasing complexity of its network, Yamato began computerizing all of its operations in 1969. The company was, however, slow to realize the need for this and lagged behind other business sectors, such as retailing, in the introduction of computers. Yamato soon realized that information technology would play a major role in the company's operations and established a subsidiary, Yamato Computer Systems Development Co. Ltd., in 1973. This company was primarily set up to offer systems support to Yamato but would later also work for other organizations. In 1974 the company succeeded in establishing an online system for the control of a package to its destination. This system greatly reduced instances of delayed or lost goods and improved overall efficiency.

Since 1958, when it arranged the safe transport of a Van Gogh exhibition to Tokyo from Europe, Yamato prided itself on being able to handle almost any goods for transport. In 1970, when Japan hosted the World Expo, Yamato was responsible for the shipment of works of art and expensive machinery from all over the world to the exhibition site. In 1972 Yamato was asked to aid in the transport of the Chinese National Theater's set during the group's tour of Japan. In the same year, founding President Koshin Kogura received the Third Order of Merit from the emperor for his achievements in the Japanese business world.

Birth of Takkyubin in the 1970s

At this time Japan was becoming one of the major exporting nations in the world. Many Japanese companies were setting up subsidiaries overseas, notably in the United States. Mainly to serve this market, Yamato opened a representative office in New York in 1971, which dealt with the delivery of business packages between the United States and Japan. On the domestic front, Yamato established freight train operations between Osaka and the southern island of Kyushu, in conjunction with the regional railway company Shimabara Railroad Co. Ltd.

In 1975 Yamato underwent a reorganization and six divisions were formed, representing the major regional areas of Japan: Hokkaido, Kanto, Tohoku, Chubu, Kansai, and Kyushu. The vast majority of Japan's population is concentrated within these regions and Yamato planned to develop the capability to reach all of these regions with its delivery services. The year 1976 marked the establishment of the now well-known Takkyubin parcel delivery service aimed at both the business and consumer markets. Initially, the service offered to deliver a parcel anywhere in the Kanto area within one working day. This was soon extended to cover most of Japan, with the delivery time varying according to distance and accessibility. The Takkyubin, which means literally "home express post," is now the cornerstone of Yamato's business. During the late 1970s the company focused on the expansion of the Takkyubin service, which extended to Niigata on the west coast of Japan, in 1978. The year 1979 marked the delivery of the ten millionth Takkyubin parcel. In the same year Yamato's founder and president, Koshin Kogura, died.

Building an International Network in the 1980s

At the start of the 1980s, with a comprehensive Japanese domestic network in place, Yamato embarked on a program to establish an international delivery service network. A subsidiary, Yamato Transport USA Inc., was established and based in New York. In the same year representative offices were set up in Singapore and Frankfurt. Yamato used these offices to market its services and coordinate operations with Japan Airlines, and in 1983 the Takkyubin service was extended to include overseas destinations. Yamato's 1981 upgrade to the First Section of the Tokyo Stock Exchange from the Second Section was followed by domestic and overseas fundraising activities on the world's money markets. The company raised SFr 50 million and $40 million in two separate bond issues in 1982. An agreement with United Parcel Service (UPS), a leading U.S. courier company with its own fleet of planes, marked the beginning of the realization of Yamato's worldwide delivery service network. Yamato's Takkyubin could now deliver to 175 countries around the globe. In the same year Yamato established overseas subsidiaries in the United Kingdom, Germany, The Netherlands, and France. In 1986, the company introduced its Collect Service--a program in which the company collected payments for products delivered on behalf of the companies that had sold and shipped the products. In 1987 Yamato added Cool Takkyubin to its list of services. This offered the delivery of refrigerated goods within Japan. The service was supported by a fleet of refrigerated trucks.

In 1990 Yamato solidified its link with UPS by the formation of a joint venture company, UPS Yamato Co. Ltd. Virtually all of Yamato's air-forwarding operations were transferred to this company, which managed every step of the shipment process, from receipt to delivery.

End of the 20th Century: Preparing for a New Economy

The 1990s were to bring changes to Yamato, as to many Japanese businesses. Virtually every sector of the country's economy was hurt by the prolonged recession that started at the beginning of the decade and lasted throughout. The ensuing deregulation of many industries created still more turmoil, in the form of increased competition from foreign interests.

One change that the 1990s brought, however, proved highly advantageous to Yamato: the advent of e-commerce. The company had already inadvertently positioned itself for the coming Internet economy when it initiated its collection service in the mid-1980s. When online shopping became an option, this collection service stood in good stead with the large number of Japanese consumers who felt uneasy about providing credit card information over the Internet. With Yamato, they could still order over the Internet without worrying about being defrauded.

By the middle of the decade, Yamato believed that a surge in online retailing was imminent--and it began preparing. Reasoning that every purchase made on the Internet would require delivery, Yamato took steps to secure its share of that market. In 1996, the company established a special unit to handle distribution services--including storage, inventory management, packing, delivery, and customer services--for web-based retailers. In 1998, it went a step further, establishing a virtual mall--called "Kuroneko Tankentai"--that played host to thousands of merchants. Yamato provided these retailers with a free storefront and online parcel tracking, but charged them for delivery and payment collections services.

While preparing for the online retailing boom, Yamato also was broadening its range of services in other directions as well. One new service followed on the heels of another throughout most of the 1990s. In 1992, the company added a variation of its highly successful Takkyubin delivery service: Takkyubin Time Service, which guaranteed delivery by 10 a.m. the following day. In 1994 and 1995, Yamato introduced two new complete moving packages--one designed to appeal to the budget-conscious and one to target families and individuals moving internationally. The year 1996 saw the addition of Yamato's Pickup and Storage Service, in which the company transported and stored customers' personal belongings in its own storage facilities. In 1997, the company added Kuroneko Mail to its menu of service offerings. Aimed at the business-to-consumer market, Kuroneko Mail delivered magazines, catalogs, and product samples to Japanese consumers' mailboxes. The main new service offering of 1998 was Round Trip service, which allowed customers to send packages to a destination, and then back again, in a single transaction. This service was originally designed to appeal to golfers, skiers, and other sports enthusiasts who were likely to transport gear to and from a destination.

Business in the New Millennium

As the 1990s gave way to the new century, Yamato began looking at ways to expand into other parts of Asia. In late October 1999, the company partnered with the Uni-President Group, a convenience store chain in Taiwan, to establish a national courier service in that country in early 2001. A second Taiwan alliance followed in June 2000--with the Shihlin Electric & Engineering Group. Together Yamato and Shihlin planned to build a business-to-business and business-to-consumer e-commerce enterprise. If these alliances proved successful, they could serve as entrée into southeast Asia and mainland China.

Also in 2000, the company separated out the logistics business it had started in 1996, launching it as a new subsidiary. The subsidiary, Yamato Logistics Produce, was dedicated to developing distribution services in the business-to-business sector.

In 2001, Yamato closed its travel business, which it had operated since 1963, and closed its four travel sales offices. That same year, the company furthered its commitment to the new economy by launching Kuroneko@Payment Credit Card Service, a third-party credit card account settlement system to be used for online and mail-order accounts.

As Yamato looked to the future, both outside analysts and company executives believed that much of the company's future success hinged on how well it could respond to the growth of e-commerce. Yamato's B2B and B2C logistics business was expected to play an especially important role in this arena.

Principal Subsidiaries: Yamato System Development Co., Ltd.; Chiyoda Packaging Industry Ltd.; Konan Industry Co., Ltd.; Kyushu Yamato Transport Co., Ltd.; Kyoto Yamato Transport Co., Ltd.; Shikoku Yamato Transport Co., Ltd.; Kobe Yamato Transport Co., Ltd.; Okinawa Yamato Transport Co., Ltd.; Yamato Shoji Co., Ltd.; Yamato Home Service Co., Ltd.; Chubu Yamato Home Service Co., Ltd.; Kansai Yamato Home Service Co., Ltd.; Chugoku Yamato Home Service Co., Ltd.; Kyushu Yamato Home Service Co., Ltd.; Tohoku Yamato Home Service Co., Ltd.; Hokushinetsu Yamato Home Service Co., Ltd.; Shikoku Yamato Home Service Co., Ltd.; Book Service Co., Ltd.; Yamato Collect Service Co., Ltd.; Yamato Lease Co., Ltd.; Yamato Parcel Service Co., Ltd.; Miyagi Green Liner Co., Ltd.; Iwate Green Liner Co., Ltd.; Saitama Green Liner Co., Ltd.; Niigata Green Liner Co., Ltd.; Aichi Green Liner Co., Ltd.; Chugoku Green Liner Co., Ltd.; Fukuoka Green Liner Co., Ltd.; Yamato Logistics Produce Co., Ltd.; Swan Co., Ltd.; Swan Net Co., Ltd.; Minami Kyushu Green Co., Ltd.; Shikoku Yamato Distribution Service Co., Ltd.; Yamato Career Service Co., Ltd.; Yamato UPS International Air Cargo Co., Ltd.; UPS Yamato Co., Ltd. (50%); UPS Yamato Express Co., Ltd.; Yamato Transport U.S.A., Inc. (50%); Yamato Customs Brokers U.S.A., Inc. (50%); Yamato International Forwarding, Inc. (50%); UPS Yamato Partnership USA; Yamato Systems U.S.A., Inc.; Yamato Transport (Canada) Inc.; Yamato Transport (U.K.) Ltd.; Yamato Transport Europe B.V.; Yamato Transport (Deutschland) GmbH.; Yamato Transport (Hong Kong) Ltd.; Yamato Travel Hong Kong Ltd.; Yamato Transport (S) Pte. Ltd.; Yamato Transport (M) Sdn. Bhd.; Yamato Transport Taiwan Ltd.; Yamato Unyu (Thailand) Co., Ltd.

Principal Competitors: DHL Worldwide Express, Inc.; Japan Postal Service; Nippon Express Co., Ltd.

Chronology

• Key Dates:
• 1919: Koshin Kogura forms Yamato in the Chuo ward of Tokyo.
• 1923: Yamato expands its range of delivery to the adjacent city of Yokohama; the company is contracted to deliver purchases for Tokyo's most prestigious department store.
• 1929: Yamato Transport Co. Ltd. is incorporated.
• 1949: Yamato obtains a listing on the Tokyo Stock Exchange.
• 1952: The company establishes an overseas freight service from Haneda Airport.
• 1957: Yamato begins using its cat logo.
• 1960: Yamato begins handling freight to New York, in conjunction with Japan Airlines and other airlines.
• 1969: The company computerizes all of its operations.
• 1971: Yamato opens a representative office in New York.
• 1976: Yamato's Takkyubin service is introduced.
• Early 1980s:Yamato partners with UPS to provide worldwide delivery services.
• 1986: Yamato introduces its collection service.
• 1996: The company establishes a logistics unit to help companies with their distribution.
• 1998: Yamato creates an online mall for retailers who need shipping services.
• 1999: Yamato forms an alliance with a Taiwanese company to provide courier service to Taiwanese consumers.
• 2000: The company spins off its logistics unit, forming a new subsidiary.
• 2001: Yamato begins courier service in Taiwan.