Yomiuri Shimbun Staff Writer

Major Japanese delivery services company Yamato Holdings Co. will seek pricing that reflects the value of its services to ensure sustainable logistics, according to President Toshiyuki Sakurai.

The logistics industry is facing a challenging environment, including labor shortages and rising fuel costs. During an interview with The Yomiuri Shimbun, Sakurai said the company would "adjust shipment volumes for major customers through appropriate pricing and negotiations, leading to rates that reflect the value of our services."

Sakurai also stressed the importance of using AI during the interview.

The following is excerpted from the interview.

The Yomiuri Shimbun: What are the challenges facing the logistics industry, and how are you addressing them?

Toshiyuki Sakurai: Companies traditionally viewed logistics as an expense to minimize, but it has now evolved into a major business challenge. The logistics industry now faces various hurdles, such as industry-wide labor shortages and rising fuel prices. As a result, companies are confronted with the critical challenge of building and maintaining sustainable logistics, and we are committed to addressing this issue head-on.

We aim to adopt a more proactive approach to the supply chains and logistics of companies sending goods, across both the parcel delivery and business-to-business logistics sectors. Costs will inevitably rise, but we are working on building efficient and robust operations with the help of AI.

Yomiuri: Yamato Holdings has jointly operated dedicated domestic freighter services with Japan Airlines Co. since 2024, but this business will end around June 2027. What led to the decision to end it?

Sakurai: Air freight costs have risen due to soaring jet fuel prices and other factors. As a result, the price gap with truck transport has widened beyond our expectations, which led to deteriorating profitability. The results have fallen short of our initial business plan. However, on the positive side, we succeeded in securing new business with companies in sectors like semiconductors and automotive, with whom we had no prior relationship. We have also been able to tap into customer demand for air cargo to a certain extent.

Landmark change

Yomiuri: What is the current status and future outlook of Yamato Holdings' core transportation business?

Sakurai: Until recently, we accepted all customer shipments, and our core philosophy remains the same. However, we have transitioned to a policy of accepting shipments that better align with the value of our service. This applies particularly to large corporate clients, where we now set appropriate pricing based on shipment volume and other key factors. This represents a landmark change for us.

Cost control has been a long-standing challenge, particularly when it comes to large truck expenses between hubs and last-mile delivery costs at branches. However, we are now better equipped to manage these costs by adjusting shipment volumes.

Yomiuri: Is AI seeing greater use at your company?

Sakurai: We are significantly stepping up efforts to use AI in optimizing vehicle allocation and route selection from this fiscal year.

We're using it to forecast shipment volumes and ensure the right staffing -- in other words, for the allocation of vehicles and personnel. The practice of using AI to forecast supply and demand has become well-established in our company. In addition to making monthly forecasts, AI has begun expanding into our daily scheduling of vehicles and personnel, and it also determines the order of deliveries.

Yomiuri: What are the future plans for growth areas and new business fields?

Sakurai: We emphasize supporting companies in reforming their supply chains. While we have traditionally distinguished between domestic and international companies, the customers we serve are essentially the same. The important thing is how we can best help clients transform their supply chains and logistics networks. We have more than 1 million corporate customers nationwide for our parcel delivery service alone. We would like to leverage this customer base to offer proposals best suited for each industry and business model.

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This article is from The Yomiuri Shimbun. Neither Dow Jones Newswires, MarketWatch, Barron's nor The Wall Street Journal were involved in the creation of this content.

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