Jan 04, 2012

New Year's Message from President Hiromitsu Kuramoto

The year 2011 was a very difficult one for Japan given the unprecedented disaster caused by the Great East Japan Earthquake and the subsequent nuclear power plant accident. The catastrophe caused enormous suffering, and claimed many precious lives. I want to take this opportunity to express my heartfelt sympathy to all those affected by the earthquake and their family members and relatives. I look forward to the earliest possible reconstruction of the affected areas.

Last year was also a turbulent year internationally, with the sovereign debt issues in Europe triggered by the debt crisis in Greece, employment insecurity in the United States, and the breakdown of supply chains attributable to the floods in Thailand. However, it was also a year when we realized how closely logistics was connected to the lives of people and to corporate supply chains across the planet.

For Yusen Logistics, the integration was completed in 35 countries worldwide, leaving only China and Indonesia, with work underway from April 2011. Thank you very much for your hard work in your individual sections and departments over the past year. I’m also delighted to celebrate the New Year together with you today for the first time as Yusen Logistics in each country and region.

Looking back on 2011, the Japanese economy, particularly production and exports, declined significantly after the Great East Japan Earthquake. Yusen Logistics was also heavily affected by the earthquake, and operating results in the first half fell far short of our expectations. However, thanks to your great efforts, performance began to recover in the second half, although there was some variability from region to region. Nonetheless, the business environment surrounding Yusen Logistics remains challenging, given financial insecurity in Europe and weak consumption in the United States.

In these circumstances, “GO FORWARD, Yusen Logistics,” the medium-term business plan for Yusen Logistics, was introduced in April 2011. In this plan, we have set “integration,” “fusion” and “dramatic progress” as our watchwords. With respect to “integration,” as I mentioned at the beginning, Yusen Logistics was created in countries and regions worldwide, excepting China and Indonesia. As the size and business domain of Yusen Logistics have expanded through this integration, we have created the framework to compete on the world stage. Aiming to make “dramatic progress” this year, each company in the YLK Group must promote true “fusion.” As they have been developing in different contexts, their thinking and culture naturally vary. This year, each region, each local subsidiary, and each section and department need to achieve amalgamation within their respective organizations by casting off this sense of unfamiliarity, so that we will move forward as a single international logistics company.

By fiscal 2013, the final year of the medium-term business plan, we aim to record net sales of 500 billion yen and ordinary income of 18.5 billion yen, achieve cargo handling volumes of 500,000 tons in the Air Freight Forwarding business, and one million TEU in the Ocean Freight Forwarding business, and become the No. 1 Kaizen company in the Contract Logistics business. For fiscal 2011, the first year of the plan, we unfortunately expect that results will be far below our initial targets, as it is undeniable that we are not fully prepared, given major changes in the global economic environment and the fact that fiscal 2011 was the first year of the integrated Yusen Logistics.

For fiscal 2012, we have begun work to develop a business plan that corresponds to changes in the global economic environment. I hope that you will seriously discuss what we should do to expand the market significantly in each region, particularly for the Air Freight Forwarding business and the Ocean Freight Forwarding business, and to set targets and work vigorously to achieve them.

As specific methods to expand the market, we will advance not only the adoption of CAP accounts, but also approaches to key customers across regional and departmental boundaries, new sales activities by industry, and sales approaches to global companies. As customer needs diversify with each year, we also have to step up the handling of cross trade cargo and respond to customers of non-Japanese companies. To that end, it is essential to strengthen our sales capabilities in each country and enhance cooperation among our operations in these markets. I hope that you will work on these tasks, taking full advantage of our strengths as an international logistics company.

In the Contract Logistics business, please provide high quality products that live up to the Yusen Logistics brand by constantly showing earnings with bolstered sales capabilities and cost reduction in each company and each region, , aiming to become the No. 1 Kaizen company.

In the Air Freight Forwarding, the Ocean Freight Forwarding, and the Contract Logistics businesses - the pillars of the YLK Group - the key component is quality.

It is necessary for each one of us to make a steady effort to keep providing our customers with refined services with made-in-Japan quality by adhering to quality transportation services. Let’s distinguish ourselves from other logistics companies, with this “service made in Japan” approach as the keynote of the Yusen Logistics brand.

Even after becoming such a large international company, the most important element is human resources. We have an urgent task to foster logistics professionals capable of conducting multiple sales activities, taking advantage of our strengths such as our global network and an ability to provide all freight forwarding services by land, sea, and air. In November 2011, we provided global sales training for 32 mid-career sales staff who gathered in Tokyo from various countries. So that these sales staff in the inaugural class complete the training program without problem, follow-up in each region and each company is important. In your day-to-day work as well, please make continuous efforts with the awareness that each individual is an international logistics operator in a global organization, through consistent thinking within that context.

Meanwhile, both companies and we as individuals are members of society who need to consider ethics, human rights, the global environment, and local communities. Yusen Logistics must be a company that is valued and respected by society, with each Group employee complying with laws and regulations and executing corporate activities and their day-to-day duties in accordance with the corporate ethics action guidelines and social ethics, so that our own Company standards and practices are mirrored by those of society at large. We must also contribute to the creation of a sustainable society by protecting the environment at our own initiative, as a mission of a global citizen. In Japan, we run various social action programs, such as a forest improvement work named Shinsei No Mori (NewbornForest), volunteer activities by Group companies in areas affected by the Great East Japan Earthquake, and tree planting activities in many parts of the world. Please observe compliance at each operating base and each company by routinely considering the roles of each individual in society.

This year is expected to be a very challenging one, given troubled economies in Europe and the United States, signs of slowing growth in China and India, and uncertainty about the global economy that cannot be ignored. However, logistics is a growth industry. And Yusen Logistics is still a young company with enormous development potential. Our policy of aiming high like the Dragon, the Chinese zodiac sign for this year, and “GO FORWARD, Yusen Logistics” remain unchanged. Let’s all move vigorously forward towards our goals as a team, having with NYK group values, "integrity", "innovation" and "intensity".