Japan Post Service Ups Profit Expectations Amid Criticism

Japan Post Service Co., the mail, parcels and express division of the newly-formed Japan Post Group, has upgraded its profits expectations for the second half of the year ending March 2008.

But its international expansion drive is facing criticism from multinational competitors. Japan Post now expects to increase H2 net profits by 8pct. This is 79.2 billion yen, which is 30.2 billion more than it forecast earlier this year, the Nikkei Weekly newspaper reported. The improvement is due to a smaller-than-expected contraction in mail volume and a reduced tax burden. Its revenues are expected to slip slightly to 1.06 trillion yen.

Over the last year, Japan Post has embarked on an expansion of its parcel and express activities. In October, it announced it would merge its domestic parcel service with that of Nippon Express in October 2008 to form a major competitor to the two market leaders, Yamato Transport and Sagawa Express. It has launched a cargo airline in cooperation with ANA, and sealed an international cooperation partnership with China Post.

But the Nikkei Weekly recently reported that foreign courier companies have complained about preferential treatment for Japan Post‘s EMS service. They claim it is unfair for the new Japan Post to enjoy the benefits of faster customs clearance and other preferential public sector treatment for its lower-priced EMS service which is increasingly competing with their express services that operate on a fully commercial basis.