Japan Post Holdings, Nippon Express to Form Alliance in Parcel Delivery Service

Japan Post Holdings Co., the recently privatized postal service, and delivery company Nippon Express Co. said Friday they have agreed to form a comprehensive business alliance.

As a start, the two companies will integrate their domestic parcel delivery operations beginning next October, they said in a joint statement.

The move is expected to help boost their competitiveness against industry leaders Yamato Transport Co. and Sagawa Express Co.

The alliance is the first major tie-up for Japan Post since the company was established Monday as part of the nation’s 10-year postal privatization plan.

Nippon Express, the nation’s No. 3 package delivery company, and Japan Post, which is the fourth-largest in the service, will set up a new company on Oct. 1, 2008, to integrate their delivery business. They are also seeking tie-ups in other areas to use their expertise, the companies said.

The new company will be a subsidiary of either Japan Post Holdings or its delivery unit, Japan Post Service Co.

Nippon Express has stepped up efforts to form partnerships to better compete with its rivals. The company said in August that it was considering joint air transport services with Kintetsu World Express Inc. between Japan and other Asian countries.

Under the postal privatization plan, the parent Japan Post was broken into four separate businesses initially held under a government-controlled holding company: an insurance company, savings bank, mail courier and post office management firm. The companies will be made independent by 2017 and listed on stock markets.