Japan Post to set up mail transport unit in FY 2005

Japan Post plans to set up a mail transport subsidiary and will decide when to do so a year from now, President Masaharu Ikuta said Thursday.

The comment by the chief of the postal public corporation is interpreted as a hint that the subsidiary will likely be set up as early as fiscal 2005.Japan Post now outsources long-distance transport of postal matter. It introduced bidding for some routes last fiscal year, but contracts on other routes have been handed out without bidding to affiliates and subsidiaries that hire former Posts Ministry officials.

Since these “family companies” have higher labor costs than their competitors, this favoritism has been blamed as a major reason for high postal service costs.

and tightly reining in labor costs, Japan Post will likely be able to reduce transport costs.

Having direct control over transport will also enable Japan Post to speed up postal delivery and flexibly adjust schedules to cope with the unexpected.