Jul 12, 2016

JP and Aeon collaborating on overseas logistics

(From left) Yoshiki Mori, Director, Deputy President and Representative Executive Officer, and Group COO of Aeon; Motoya Okada, Group CEO , President, Representative Executive Officer, Director of Aeon; Masatsugu Nagato, President, Chief Executive Officer and Representative Executive Officer of Japan Post Holdings; Kunio Yokoyama, CEO and President of Japan Post

Japan Post Holdings (JPH) and Aeon Group announced July 8 that they will proceed with collaboration in four fields including overseas logistics. At first, Toll Holdings, a subsidiary of Japan Post (JP) of JPH in Australia, will conduct through transport of beef produced by Tasmania Feedlot, a subsidiary of Aeon Group in Australia, from the local meat-packing factories to Osaka Port. They will consider running logistics business also in Asia area from here on. JP dispatched in 2015 ten employees to Toll, and has gone ahead with sales activity in and out of Japan centering on Japanese companies, resulting in being commissioned by multiple Japanese companies including automobile-related ones. JP aims to beef up its sales activity by measures including cooperation with JP Sankyu Global Logistics, a subsidiary of JP.

Regarding business related to AEON Group, JP will utilize its forte in transport and delivery in Australia on which Toll is based. As for the transport flow, the company will firstly ship the cargo on land from the meet-packing factories in Tasmania Island, where there are stock farms, to Burnie Port in the island. And then Toll Shipping, a subsidiary of Toll operating RORO vessels between the island and the mainland Australia, will ship it from the port to Melbourne where Toll will clear customs for export. The Tasmanian beef loaded in reefer containers will be shipped to Osaka via Sydney, Brisbane and Yokohama. Toll will also make arrangements for documents necessary for export. On arrival at Osaka, the cargo will be delivered to Aeon after unloading at the designated warehouses. JP Group will not be involved in the shipment within Japan. 360 TEUs are to be used for the service annually. Toll's sales from this Aeon-related business is estimated at several hundreds of million yen.

The first shipment was received at the meat-packing factory on July 7, and departed from Burnie Port on July 9. After arriving at Melbourne on July 10 and departing for Osaka Port on July 13, it is scheduled to reach the destination at the end of July. Utilizing this intermodal through transport conducted by Toll will reduce the lead time and cost by two days and 25%.

As Tasmanian beef has been selling well, the annual beef cow and calf production capacity is planned to expand from 18,000 to 25,000 heads. While the sales have been growing in Hong Kong and Malaysia, JP is to consider a similar collaboration in logistics also in Asia zone in future.

JP announced in June 2015 that it had acquired 100% ownership of Toll Holdings, and made it its consolidated company in July 2015. JP posted in the July 2015-March 2016 period an operating revenue of A$6,291 million, down 2.6% from the corresponding period a year before, an EBIT (JP's operating profits) of A$199 million, down 36.2%. The amount paid for the acquisition is A$6,486 million (converted to Y616.2 billion at the rate of Y95 to AUD as of the conclusion of the acquisition contract). It added up Y17.1 billion as goodwill in the fiscal year ending March 2016.

JP plans to position Toll as a platform, developing business focusing on Asia area. The company, making an effort to approach Japanese companies, has already been entrusted with shipment of cargo related to auto, foods and apparel industries, centering on the routes between Japan and Australia. At the same time, the cooperation with JPSGL is gradually making progress.

With respect to Aeon, there are cases in which Japanese major forwarders and other companies run the business of supply chain and warehouse management related to Aeon in ASEAN countries. An official at the postal service and logistics sales division of JP stated of its sales activity that, "It is difficult to prospect growth from here on in Japanese logistics market, which could lead to excessive price competitions. It won't be our goal to pursue competition like that. Meanwhile, in logistics market in Asia other than Japan, business is expanding because its market environment is different from Japanese. Still, we are not to deprive other companies of the existing logistics business that has been established by a long-term contract. We have the notion that when a new business opportunity is emerging, we will take it in."

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