Japan’s Yamato to revamp fees and labour
TOKYO: Yamato Holdings Co, Japan’s largest parcel deliverer, will change its rates and reduce volumes, seeking to put itself back on firmer financial footing as it grapples with a labour shortage and surging shipping volume from Amazon.com Inc and other web retailers.
The goal is to boost capacity for e-commerce deliveries and restore profitability, while building a more flexible labour force and reducing overtime by half, the Tokyo-based company said as it detailed its midterm business plan.
Corporate clients will pay delivery rates based on a sliding price scale, which will take into account external factors including fuel prices and labour costs.
More details on client pricing would be released at next month’s quarterly earnings announcement, Yamato said.
The parcel giant, known for its black cat logo and deliverers in green caps running through neighbourhoods, has spent most of the year negotiating new rates with Amazon’s Japan unit and other large customers.
Yamato has been pressured by the expansion of online shopping, while a labour shortage in Japan makes it more difficult to expand its workforce. It also said in April it would raise prices for retail customers for the first time in almost three decades, which will go into effect Oct 1.
“With the growth of e-commerce and a labour shortage, we have been unable to deal with increasing parcel volume,” Masaki Yamauchi, Yamato’s president, told reporters at a news conference.
“Our employees’ work environment has also deteriorated significantly. So with this in mind, we needed to come up with a plan for sustainable growth for the next 100 years.”
Negotiations with more than 80% of large shipping clients, which number about 1,000, had been completed, Yamauchi said.
Munetake Yamamoto, a spokesman for Amazon Japan, declined to comment, saying that the company didn’t comment on contractual agreements.
Yamato’s 60,000 drivers – and its legion of sub-contractors – delivered 1.87 billion parcels in fiscal 2016. That number will decline to 1.77 billion in 2018, before picking up again as that logistics network is overhauled.
Yamato is taking measures to reduce overtime and hire more temporary workers to handle the volume of packages passing through its warehouses and delivery vans.
The company said it would spend more than 100 billion yen (US$887mil) on over three years.
Scrutiny on Yamato has increased as local media reports highlighted difficult working conditions for its employees in the face of surging parcel deliveries.
Earlier this year, the company said it would retroactively pay 19 billion yen to compensate about 47,000 employees for unpaid overtime over the past two years. — Bloomberg labour reform