Japanese Yamato Transport edging nearer mail market
Moving closer to head-on competition with Japan Post, Yamato Transport Co. has started collecting printed matter at convenience stores for its "mail" service, hoping to make inroads in the consumer market.
This may result in the leading door-to-door parcel-delivery service firm handling first-class mail "inadvertently" in violation of the mail law, which limits such handling to Japan Post. Yamato could wage a guerrilla war through legal loopholes as its frustration with the post office grows.
Yamato's Kuroneko delivery service, available at stores in the Seven-Eleven Japan Co. convenience chain, undercuts Japan Post's for documents weighing under 1kg. For example, Yamato charges 80 yen (73 cents) against Japan Post's 120 yen for an A4-size document weighing up to 50 grams.
Convenience-store clerks tell customers that personal letters cannot be handled, but there is no way to verify that such mail is not included.
Yamato Senior Managing Director Michio Abe emphasized, "We do not intend to violate the law, but the probability of personal letters happening to be included in our deliveries is not zero."
A Japan Post executive said it appears that Yamato has decided to challenge the legal restriction by gathering customer support.
Former President Masao Ogura, founder of the door-to-door parcel delivery service, fought bureaucracy to expand the new market by placing consumer convenience first, placing opinion advertisements in newspapers among other techniques.
Once the firm had built its customer base for door-to-door parcel deliveries, the government reluctantly deregulated the market. Yamato seems to be hoping the same will happen with the mail.
A Yamato executive said that, if the Ministry of Public Management, Home Affairs, Posts and Telecommunications tries to continue limiting the mail business to Japan Post, the company will appeal to public opinion.
For fiscal 2003 ended March, Yamato reported a 4% year-on-year increase in consolidated sales, topping 1 trillion yen for the first time. The company delivered 1.01 billion parcels, up 2.8% year on year, but it cannot afford complacency.
Sagawa Express Co., long in second place, fell short of the leader by just 100 million parcels last fiscal year.
Despite relatively low volume at just 182.18 million parcels, Japan Post's parcel deliveries rose 9.9% year on year in fiscal 2003, and should gain momentum through strengthened ties with convenience stores.
Japan Post on June 1 launched drop-off points at some convenience stores operated by Daily Yamazaki Co. and am/pm Japan Co. Its parcel operations have 70,000 drop-off points nationwide, mainly at liquor stores and tobacco shops.
C&S Co. and Lawson Inc., which have tie-ups placing Japan Post mailboxes in their stores, have refused to serve as drop-off points for Yamato's delivery services. Neither convenience-chain operator has decided whether to handle Japan Post's parcel services.
The difficulty is getting convenience-store customers to understand that first-class mail is not allowed. The postal service is simple, by contrast, since it involves just dropping a stamped envelope into a mailbox, and offers higher-quality services such as tracking.
The personal mail market is not entirely closed to private operators, but approval from the Home Ministry is required. About 40 companies, such as bike courier agencies, have undertaken the process to offer three-hour letter delivery and similar services. Yamato's refusal to do so seems unlikely to win it much public support.
