A DV ER TIS E ME N T

Driving Global GrowthLogistics provider Nippon Express developed its business model overdecades serving Japan’s manufacturers. Now it’s looking to provide thesame high-quality services to multinationals from other countries as it
transforms into a truly global logistics company.
AS A 40-YEAR COMPANY VETERAN,
Yutaka Ito has seen the operations of freight
forwarder Nippon Express evolve over decades. When he joined in 1978, Japan wasbusy making electronics and other goods
which Nippon Express shipped to Westernmarkets. The next phase saw Japanese manufacturers open factories in Europe and theUS—and turn to Nippon Express for logistical support within those markets. ThenJapanese manufacturers started moving
their factories to Asia in pursuit of lower
costs. Again, Nippon Express accompanied
them, adapting its business model to fit its
clients’ evolving needs, as encapsulated in
the slogan “We Find the Way.”
Now Asia’s economic role has changed
once more. “Asia is not just about
manufacturing for export; it’s about
manufacturing things locally for local consumption,” says Ito, chief managing officerof Nippon Express’ International BusinessHeadquarters. The numbers prove Ito’spoint. Whereas most volume in the logistics business used to be centered in Europe,
North America and Japan, an enormous
70% of global volumes now originates inor passes through Asia.
Nippon Express’s own footprint haschanged radically with the progress of globalisation. In 1988, the company had just
2,000 employees and 100 bases outside
Japan. Today the equivalent numbers are
21,000 and 700 in 45 countries. In quest of
its strategic goal of becoming “a truly global logistics company,” Nippon Express has
adopted a two-pronged approach: first, towin Japanese companies’ business as theyshift their priorities away from a shrinking
Japanese market to overseas; second, to secure more non-Japanese multinationals ascustomers.
This year, Nippon Express is aiming
to achieve ¥430 billion (US$3.9 billion)in overseas sales. Profit margins vary in
the four regions in which the company
operates, being higher in EMEA and theAmericas and lower in East Asia and South
Asia & Oceania. “The logistics infrastructure is somewhat weak in Asia, so it’s acostly place to do business,” Ito explains.
“Our priority right now is to expand volumes, build out infrastructure and establish
a strong foothold in the market.”

Tailored strategies by region
In mature markets like EMEA and theAmericas, shipping high-ticket items likewww.nipponexpress.com/

We are No. 1 in Asia.
We can use that asa stepping stone forbecoming global No. 1.

Express Your Business:
The tagline in thisbillboard at Singapore’s
Changi Airport highlights the company’s
ability to accelerate its
customers’ business.

Yutaka Ito
Executive Vice President
Chief Managing Officer
International Business Headquarters
Nippon Expressautomobiles and medical devices, and providing just-in-time delivery of auto-components, represents the core of the business.
The company is also growing by pushinginto high-value-added areas such as logistics for high-end fashion. Since 2013
Nippon Express has acquired two Italianfirms which specialise in delivering clothing and props in perfect condition. As Asian
countries become richer, demand for this“white-glove service” is expanding. Growthis also accelerating after the appointmentof more local European CEOs and staff withthe right knowledge and networks to win
more business from non-Japanese clients.
In EMEA, Europe is not the whole story.
Nippon Express is also casting an eager

Reviving the Silk Road
This year over 4,000 non-stop, high-speed freight trains will
make the transcontinental journey from China to Europe
thanks to rail infrastructure upgraded as part of China’s Beltand Road initiative. Rail is faster than sea, especially frominland China: the journey from
Chongqing to the German portof Duisburg takes 15 days versus
around 54 for the normal riverbarge/container ship combination.
Nippon Express launched
its Asia-Europe rail service inNovember 2015. Cargo volumes—of items like LCD panels, autoparts and printers—have doubled
every year since. With the additionof air & rail and sea & rail options
from Japan in May 2018, growth
should keep powering ahead.

eye on nearby frontier markets, opening
offices in Morocco and Kenya in 2017.
“Casablanca is our gateway to North Africa
and Nairobi to East Africa,” says Ito, whoexpects cargo volumes to expand as more
infrastructure like the recent MombasaNairobi railway comes on-stream.
It’s a similar story in Latin America where
the company opened a Panama City office,near the newly widened Panama Canal, inJuly 2018. “Latin America has huge potential. It’s one of the markets of the future,”
Ito says.
In Asia, that potential is being realised
right now, thanks to the company’s extensive network and the synergies it creates. In East Asia, China represents Nippon

Four faces ofglobal
logistics

Express’s biggest market. Alongside massive imports and exports, demand for domestic logistics services is soaring. Nippon
Express has a strong position making justin-time deliveries of auto-components tomultinational car manufacturers in southern China. And in 2015, the company
launched a unique container-based freightrail service linking China to Central andEastern Europe.
Despite China’s enormous scale, it’s actually in South Asia (which includes SoutheastAsia) that business is growing fastest, driven
by a boom in the intra-regional transport ofconsumer goods. To capture this business,
Nippon Express has more than doubled thenumber of its regional bases, from 124 to258, and increased its warehouse area by
60% in the last five years. “South Asia consists of multiple countries linked together
by ASEAN,” explains Ito. “We’ve built atightly integrated network of cross-borderWith a history stretching back to the latenineteenth century, Nippon Express enjoys
almost universal brand recognition anda high level of trust in its domestic market. Many decades of serving demanding
Japanese clients means that the company
offers a uniquely Japanese combination ofcompetitively priced, high-quality service
with incremental improvement, or kaizen,
on top. The challenge now is to communicate these strengths to multinational companies. “As the speed of change accelerates, wewant to support our clients’ business throughlogistics. By providing the same standardised
high-quality service worldwide, we can win
the trust of global clients,” Ito says. “We areNo. 1 in Asia. We can use that as a steppingstone for becoming global No. 1.”

The 100-year-old Panama Canal was widened in 2016. It
can now accommodate ships carrying 13,000 containers
versus a previous limit of 5,000. This dramatic capacity
increase should boost not just the Panamanian economy—already one of the region’s fastest-growing—but allof Latin America.
Nippon Express has beenin the Americas since 1962
when it opened its New Yorkoffice, but its presence in Latin
America was modest. Thatchanged in July with the establishment of a Panama branch:
the company is now in poleposition to use Panama’s ports
and free trade zone as a basefor serving the logistics needsof this continent of 600 millionplus people.

Serving Asia’s Muslim community© naoko sakuragi

Global service: global brand

Widening opportunities inLatin America

A flourishing business in Africa
Close to the equator and high in altitude, Kenya offers the perfect weather for flowers to thrive. Asia-bound exports of flowers took off when a new generation of Middle Eastern airlines
started offering flights linking Africa and Asia
via their own hub airports. Japan nowbuys about 5% of Kenya’s total roseoutput.
Nippon Express launched aKenya-Japan flower-shipping
service in July 2014. The company won business by solving Japanese importers’
chronic headaches: glitches with paperwork thatcaused customs delays,
and a lack of notice aboutflight irregularities. With
its customer base growing fast, Nippon Express
opened a Kenya branch in
Nairobi in August 2017.

trucking services. South Asia’s our top focus. We’re investing aggressively there.”

Devout Muslims want their food to be made, stored andtransported in line with Islamic law. The halal certification
process is often fragmented. Unusually, Malaysia has a single
department, JAKIM, handling halal certification.
By ritually cleansing warehouses and trucks with clay
and water before use, Nippon
Express Malaysia earned
JAKIM halal certification for its
services. As well as offering domestic halal transport, Nippon
Express supplies halal meals toairlines in a tie-up with a local
food company. It’s also using its
certification to import Japanesefood products from wagyu beefto flour. Longer-term, the plan isfor Malaysia to serve as a stepping-off point to other Asian
Muslim-majority nations likeIndonesia.