Continuing global supply chain challenges
In recent years, wave after wave of unthinkable disruption has swept over global supply chains: trade spats between superpowers, pandemic-related closure of ports, a container ship blocking the Suez Canal, and most recently, war in Europe.
The results have been gummed up trade routes, severe space shortages and soaring prices for international cargo, with industries scrambling to secure vital supplies and deliveries.
Despite all this turbulence, both the volume and value of cross-border trade hit record levels in 2021, surpassing pre-pandemic levels
That is a remarkable feat. And it is in no small part thanks to the efforts of behind-the-scenes logistics companies making sure things are where they need to be, on time, as ordered. One example of such effective adaptation is the Nippon Express Group, Asia’s largest and one of the world’s leading global logistics service providers.
“Throughout this period of severe disruption, we have been focusing daily on how to protect our customers’ supply chains,” says Toshiro Uchida, Senior Managing Executive Officer of the Global Business Headquarters for Nippon Express Holdings.
“As logistics specialists, our task was to minimise delays and restore normality for our customers.”
Toshiro Uchida, Senior Managing Executive Officer of the Global Business Headquarters for Nippon Express Holdings
Toshiro Uchida, Senior Managing Executive Officer of the Global Business Headquarters for Nippon Express Holdings
Take the latest disruption. Following the outbreak of war in Ukraine, the company launched a new route combining train and ship from China to Europe that averted conflict zones by going south through the Caspian Sea and Istanbul. Earlier this year, the Nippon Express Group provided charter flights and made use of alternative routes and ports to overcome Covid-related disruptions at Shanghai port, the world’s largest by trade volume.
Besides offering such emergency responses, the Group has been at the helm of industry trends in innovations for longer-term logistics sustainability and resilience. The solutions include lowering the ecological footprint of transport, aiding in reshoring and accelerating the automation and digital transformation of warehousing and transport.
Dynamic global growth
Such efforts are paying off. The Nippon Express Group is moving at a fast clip towards its vision to become “a logistics company with a strong presence in the global market”.
“The past three years have delivered very strong results in terms of achieving our most important management goal of global growth,” Uchida says.
Overseas revenues for 2021 hit $6bn*1 (out of total group revenues of $20.3bn*1), widely exceeding a mid-term target of $4.5bn*1 set in 2019. The Nippon Express Group is steadily advancing towards its target for 2037, the company’s centenary, in which half of all Group sales, expected to reach $30bn-$35bn*1, is generated overseas.
In each of the Group’s five key growth sectors – Electric and Electronics, Automotive, Apparel, Pharmaceutical/Medical and Semiconductor – overseas revenues jumped by over 30 per cent in 2021 year on year. The robust figures reflect how the global forwarder is successfully matching the evolving needs in the circulation of goods critical to our world economy.
In automotives, the Nippon Express Group has been helping carmakers shift toward EV production, setting up new operations and services in regions such as Central and Eastern Europe as well as North Africa, which are emerging as key manufacturing spots. In semiconductors, where geopolitical pressures to re-shore and shorten supply chains remain significant, the company has been expanding domestic logistics services within the US and Taiwan. In its mainstay electronics businesses, the company has acquired new clients such as device makers, in part through a new approach of managing global key accounts with direct involvement of top-level executives.
M&A efforts and synergies are also bearing fruit.
“Our recent acquisition of the US pharma logistics company MD Logistics is a vital step forward for establishing a global platform for pharmaceuticals based on global quality standards such as GDP,” says Uchida.
“We have already established a network infrastructure, including a digital platform, in Japan and hope to expand this network in other regions to create an end-to-end worldwide solution for pharma logistics.”
Elsewhere, the company’s recent acquisitions of European luxury fashion logistics companies and partnerships with major fast fashion companies give it a strong position to capture recovering post-pandemic demand in global shipments of both fast and high-end global apparel.
Not just moving things
Although global logistics is an increasingly crowded and competitive market, the company believes it has the competencies which give it an edge over competitors and help its clients build supply chains of the future.
“Our core strength lies in ensuring quality control in storage and delivery by knowing the unique features of our clients’ cargo, inside and out. It stems from a culture of relentlessly supporting our clients with tailored business solutions, rather than simply seeing logistics as just moving things,” says Uchida.
Combined with this mindset are the Group’s planet-spanning physical assets. The forwarder offers clients a wide choice of carriers (shipping companies and airlines) and routes combining multi-modal transport which can ensure seamless and flexible shipments across borders.
Equally important is the company’s dominant position in terms of infrastructure, personnel and buying power for logistics services in Asia, one of the most critical battlegrounds for forwarders, explains Uchida.
With the mainstreaming of ESG, the Group is further committed to lowering the ecological footprint of its logistics services. This includes promoting the use of energy-efficient transport modes, including EVs and rail, as well as partnering with airlines to promote the use of sustainable aviation fuels. A recent unique solution from the Nippon Express Group is a last-mile delivery service using a hydrogen-engine-powered boat in Venice, Italy, a city particularly sensitive to global warming. Earlier this year, the Group tripled its carbon dioxide emission reduction target for 2023 to some 30 per cent lower than 2013.
Nippon Express offers a last-mile delivery service using a hydrogen-powered boat in Venice for greener logistics.
To the next stage
Finally, key organisational changes look to boost Nippon Express’s global push.
Its recently established GNC (Global Non-vessel Operating Common Carrier Center) in Singapore is acting as an engine for sales and standardising operations in its global freight forwarding business. The GNC not only enables joint purchasing to secure better rates and space from shipping companies, but also helps internationalise the company’s staff to more effectively approach non-Japanese clients.
In January of this year, the Nippon Express Group transitioned to a holding company structure with the establishment of Nippon Express Holdings. It simultaneously launched a new Group brand featuring a distinctive brand symbol and design. In July, the Nippon Express Group will establish a Global Business Headquarters to strengthen its organisational structure and functions for consolidating and optimising its global businesses and strategies.
“Our new structure means that various regional companies will be on an equal footing with the Japanese company, Nippon Express Co., Ltd., reflecting a turning of the rudder towards being a truly global company,” says Uchida.
“Our new Group brand symbol, which no longer has the traditional Japanese character, is already quite popular among overseas staff and customers. It symbolises a new and neutral identity for our Group.”
1 Converted at the exchange rate in effect at the end of December 2021.
