A DV ER TIS E ME N T

Delivering the Goods

www.nipponexpress.com/

Nippon Express is currently the largest logistics provider in Asia andnumber three in the world by revenue. It aims to climb even further up
the league table by targeting a new global client base outside Japan.
For most of the 1960s, Japan’s
economy grew at an explosive rate of over
10 per cent a year. This was the decade
when the country’s automobile and electronics brands established themselves on
the world stage, and Asia became the workshop of the world.
Of course, those pioneering Japanesemanufacturers needed help shipping theirproducts abroad. Enter Tokyo-based logistics provider Nippon Express: founded in
1872, the company built its international
footprint handling imports and exports fora top Japanese camera maker in the early
1960s. “Now we work with all Japan’s biggest names in cars and electronics,” declares
Mitsuru Saito, Nippon Express presidentand CEO, “Our overseas network comprises
over 20,000 employees in 266 cities across
44 countries.”

Japan. Asia. The world.
In its home market, Nippon Express is thetop logistics provider. With a fleet of almost
20,000 vehicles and 7 million square metresof warehousing space, it generated around
60 per cent of its $16.76 billion (¥1.86 trillion) revenues for the year ended March31, 2017 in Japan. The company transports
everything from heavy equipment like bullet train carriages and wind-turbine blades
through cash and valuables to pricelessworks of art. (Nippon Express handled theMona Lisa when it came to Japan in 1974. It
is currently advising on the transportationof ancient artefacts at the Grand EgyptianMuseum in Cairo, which is scheduled toopen in 2018.)“Our clients like to say that ‘NipponExpress can deliver anything,’” says Saito.
“We have three core strengths: an extensive
overseas network; the ability to provide alltransport modes—land, air and marine;
plus high service quality and advanced
technology based on in-house R&D.”

Nippon Express now wants to add moreglobal businesses to its client roster ofmainly Japanese names. The goal of thecurrent corporate strategy New Sekai-Nittsu
is to transform Nippon Express into “a truly global logistics company,” by targeting
increased profits at home and rapid expansion abroad, in Europe, the United States,
but most particularly in Asia.
Why Asia? Just look at the numbers: Theeconomies of key Asian countries grew at anaverage 6.1 per cent versus 1 or 2 per centfor the West and Japan in 2016. “Most ofthe world’s production and consumption
now takes place in Asia, and it’s where ourclients are most active,” says Saito, who projects strong revenue growth of 50 per cent inSouth Asia and Oceania and 33 per cent inEast Asia over the next two years.
China provides a neat example of how
Nippon Express is applying its “made-in-Japan” know-how to the needs of new Asianclients. The Chinese car business is booming as the middle class embraces motorisation. Nippon Express does “milk runs”
for local OEMs in the south of the country—collecting components from suppliers,
bolting them together and injecting theminto the final assembly process.
A buoyant Asian manufacturing sectormeans that more factories are being built.
Nippon Express responded to demand byestablishing a new Singapore subsidiary,
NEX Global Engineering, in 2016. The
company specialises in the transportationand installation of heavy plant and equipment for industrial facilities.

Moving downstreamManufacturing, though, is not the wholestory. As Asia continues to evolve into a vibrant consumer market, there’s also an opportunity for Nippon Express to transport
everyday consumer goods between Asian
nations in parallel with the existing model

Our core strengths are
an extensive overseas network,
the ability to provide alltransport modes, and highservice quality.
of shipping big-ticket items like automotive
parts and electronics from Asia to the West.
“The plan is to move more downstream
into areas like food, fashion and pharmaceuticals,” says Saito.
In Malaysia, for example, Nippon Express
has secured special Halal certification enabling it to transport and store food in linewith Islamic law. Indonesia—another
Muslim-majority nation with a population
almost nine times Malaysia’s—is even more
appealing. Says Saito: “Indonesia is one of thecountries where we’re most active in ASEAN.
It’s becoming increasingly attractive as a large
market for food and other consumer goods.”
Nippon Express has developed products
like SS7000, a cross-border truck transport
service linking key cities in China and theMalay Peninsula to meet booming demandfor logistics inside Asia. It’s also getting behind the Chinese government’s “One Belt,One Road” policy, for example by teaming up with Kazakhstan’s national railway
company to provide rail-based containertransport from China to Germany with its
Eurasia Train Direct product. First-half sales
for this calendar year have doubled versus
one year ago.
In Europe and the United States, Nippon
Express already has a robust business serving
Japanese multinationals. By expanding into
new sectors like apparel and pharmaceuticals and increasing the proportion of nonJapanese clients, Saito is targeting revenue
growth of 20 per cent in the Americas and 13
per cent in Europe over the next two years.

Rationalisation and innovation
This drive for broad-based growth abroad
is accompanied by a push for higher profits at home. Focusing on the metropolitan
areas around Tokyo, Nagoya and Osaka,
where most Japanese global companies
congregate, Nippon Express has radicallystreamlined its processes through a couple
of innovations: first, a one-stop model thatenables customers to buy multi-mode transport solutions as a single package instead of
having to deal with different departments
for land, air and marine; and second, an
account management system that serves
as a single touch point for the totality ofa client’s global activities, resulting in radically more efficient communication withno overlap between branch, country andregional offices. Indeed, so effective werethese process innovations that they havenow been implemented globally.
The same rational spirit is at work in
R&D where disparate initiatives have been
unified under the Logistics Engineering
Strategy Group. Technologies now being
tested include drones for warehouse inventory management and autonomous truck
platooning. (Platooning refers to a convoyof several trucks in which only the firsthas a driver, while the others are autonomous). “In the age of IOT, AI and robotics,

Mitsuru Saito
President and CEO
Nippon Expressoutsiders coming in to disrupt our businessis a risk,” says Saito. “A large company likeus has the resources to create new platforms
and become a logistics innovation leader.”Global mindset
Saito believes the company needs to “selfdisrupt” and take a less conservative approach to compete more effectively against
the European firms that dominate the field
today. “For the Japanese, Japan tends toloom large in their consciousness wherever
they are,” he says. “But we are no longer aJapan cargo specialist: we need to start thinking of Japan as just one region on a par withthe other four regions in which we operate.”
Saito has implemented a series of policies to globalise the business. He is actively
promoting local staff to head international
subsidiaries—a policy that has won thecompany major new clients in Europe. In
the United States, more than half the company’s clients are already non-Japanese.
In December 2016, a new unit, the GlobalLogistics Innovation Center (GLIC) was set
up in Singapore with an exclusive focus
on securing global non-Japanese clients.
Meanwhile, the company is breaking into
new fields and territories through M&A, as
it did via the acquisition of Italian highend apparel specialist Franco Vago.
All these steps mean that the 20 per centof its turnover that Nippon Express currently generates overseas is set to rise fast.
“Building on our track record of serving
demanding Japanese customers, we offer high-quality solutions tailored to individual customers—something that ourcompetitors find hard to do,” says Saito.
The company’s long-term goal is to raise
its overseas sales ratio to 40 or even 50 per
cent of the total. And as it pushes ahead
with its transformation strategy, Nippon
Express is already well on the way to becoming a “truly global logistics company.”

TempSure is a temperature-managed service
for transporting pharmaceutical and foodproducts by air.

​ umber of overseas bases andN
employees
678■ Overseas bases■ Overseas employees

20,706

15,934
388
9,066
248
181
51

3,936

590
1980

1990

2000

2016

2010

Revenue breakdown by regionOverseasbusinessJapan

65.4%

17.9%

¥1.86 trillion
Overseasrelated
business

34.6%

Year ended March 31, 201711 Nippon Express’s patented Blade Tilting

Device can transport wind-turbine blades
up narrow mountain roads by tilting themup and down or from side to side.
2 A bullet train carriage being unloaded froma ship.
3 Expert staff installing a Roman mural from
Pompeii in the National Art Center, Tokyo.

4 The Himawari 7 is a roll-on roll-off cargovessel on the Tokyo–Hokkaido route.

5 Air transport is used for high-speed

logistics.

6 Nippon Express containers on a train

travelling between Thailand and Malaysia.

7 A Nippon Express truck makes its way

through the Amsterdam streets.

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