At a Glance
Segment

Domestic Transportation

Takkyubin

MovingKuroneko MailLogistics

InternationalTransportation

Information
Communications

Other Businesses

Business Description
The domestic transportation business is mainly focused on delivery
operations such as Takkyubin, Kuroneko Mail and Moving services. Thiscomprises the Group’s core business.

Yamato Transport offers next-day delivery of parcels almost anywhere inJapan. A sophisticated tracking system allows customers to check theprogress of a shipment at key stages of the logistics chain. The Takkyubin
business includes Collect Service, Cool Takkyubin, Golf Takkyubin, Ski
Takkyubin and many other services. A total of 983 million packages werehandled during the past fiscal year.
The moving sector transports household items for families andindividuals. Yamato Transport offers a number of moving-related services
as well, such as house cleaning and home appliance disconnection andinstallation services. There is also an international moving service.

This service delivers materials in letter-size envelopes to eliminate theneed for folding documents. Envelopes are simply placed in each recipient’s
mail box; no signature is required. The status of each packet can betracked at Yamato Transport’s Website. In April 2003, Kuroneko Mail wassignificantly upgraded with the introduction of more packet sizes, anext-day delivery option for most areas of Japan and other new services.
Yamato is equipped to handle all aspects of logistics, from the receipt ofmerchandise through its storage, packaging and shipment. This fully
integrated line of support contributes directly to greater productivity atclient companies.

Yamato Transport has its own forwarding business to transport items
to more than 100 cities around the world. A reliable cargo tracking
system and other services mean that the needs of each shipper can beprecisely addressed.

By drawing on the Yamato Group’s knowledge gained through theprovision of transportation services, subsidiary Yamato System
Development performs data processing services on an outsourcing basis
and operates the computer systems of other companies.

This segment covers many types of activities. Major components arepackaging operations offered in conjunction with logistics operations,the sale of boxes and other packaging materials, book sales through theInternet, sales of other merchandise, and the leasing of motor vehicles.

Performance

Sales and Sales Composition

Yamato Transport has worked to further raise the quality ofexisting products such as Takkyubin and Kuroneko Mail, andincrease customer convenience by expanding its distribution
network. This approach and success in winning new customers
led to a year-on-year increase of 2.7% in operating revenues fromdomestic transportation, to ¥856,827 million (US$7,128.3 million).

Sales (¥ millions)

In fiscal 2003, operating revenues increased 2.2% to ¥698,499
million (US$5,811.1 million). Contributing to this growth werethe provision of new Internet services, such as the SD Direct andTakkyubin mail notification services, and an increase in business from corporate customers.

Sales (¥ millions)

In fiscal 2003, Yamato succeeded in increasing the number ofhousehold moving contracts by enhancing its services. However, a downturn in moving contracts for individuals due tointense competition caused operating revenues to decline 2.6%
to ¥43,864 million (US$364.9 million).

In fiscal 2003, growth in volume from small and midsize companies and measures to bolster the sales and service network led
to a 3.4% increase in operating revenues to ¥62,536 million(US$520.3 million).

In fiscal 2003, operating revenues rose 53.5% to ¥13,925 million(US$115.8 million) because of a large increase in the number oflogistics customers.

’00

761,036’01

802,505’02

834,418’03

856,827

’00

88.1%

622,666’01

658,156’02683,589’03

698,499

Sales (¥ millions)’00

42,284’01

44,202’02

45,041’03

43,864

Sales (¥ millions)’00

50,855’01

57,608’0260,493’03

62,536

Sales (¥ millions)
’00
’01
’02

9,071

’03

13,925In fiscal 2003, the volume of international freight originating inJapan was generally flat. However, Yamato Transport achieved
growth by locating new customers with small to midsize export
volumes and increasing the volume of exports of automotive partsand products to the U.S. and Asia. The result was a 21.1% increasein operating revenues to ¥74,117 million (US$616.6 million).

Sales (¥ millions)

In fiscal 2003, facilities were added at logistics centers in theTokyo, Kanagawa and Nagoya areas and emphasis was placed on
capturing orders involving logistics data processing systems. Inaddition, aggressive marketing activities were conducted thatincluded sales of software for logistics systems and seminars fore-business ventures. These activities resulted in a 2.5% increasein operating revenues to ¥18,888 million (US$157.1 million).

Sales (¥ millions)

In fiscal 2003, sales of books increased due to growth in ecommerce orders from customers using PCs and mobilephones. Results were also boosted by the inclusion of eighthome service companies in consolidated results for the firsttime. Due to these factors, operating revenues increased 23.3%
to ¥22,303 million (US$185.6 million).

Sales (¥ millions)

’00

7.6%

20,085’01

67,568’02

61,189’03

74,1172.0%’00

18,059’01

19,425’02

18,431’03

18,888

’00
’01
’02
’03

2.3%
13,175
17,44618,082
22,303

YAMATO TRANSPORT Annual Report 2003

14,15