Japan Post forms alliance on direct mail with Sagawa

Sagawa Express Co. and Japan Post have agreed to join forces in the delivery of direct mail to households.

The two entities aim to slash costs and expand their customer bases by having Sagawa collect marketing materials and other direct mail from corporate clients and Japan Post deliver them to homes. They are also eyeing jointly handling personal correspondence – on which Japan Post has a near monopoly – in the near future.

Several private-sector parcel delivery firms now offer direct mail delivery services, including Sagawa, Yamato Transport Co. and Nippon Express Co. Industry leader Yamato delivered some 600 million direct mail items last fiscal year. Sagawa, which lags Yamato in building a nationwide delivery network, came in second with around 180 million pieces of direct mail delivered.

By tying up with Japan Post, whose network is seen as highly reliable by users, Sagawa believes that it can attract more corporate customers by offering a comprehensive service that combines parcel delivery and distribution operations with mail delivery service.

For its part, Japan Post, which could be privatized as early as within four years, aims to turn its postal service profitable from this fiscal year, according to its action plan released in May. But postal volume is shrinking, due in part to the spread of e-mail and intensifying competition with private-sector rivals in direct mail delivery. So the public corporation expects the planned tie-up with Sagawa to help it expand the use of its postal network.

The two entities also believe they can handle personal correspondence delivery with Sagawa’s direct mail delivery service, provided that Japan Post delivers it. If this plan is approved, Sagawa will be able to handle bills, greetings, notices and other personal correspondence from companies. For example, it will be able to deliver bills, catalogs and products sent by mail order firms to their customers.