February 5, 2005
Nippon Express is one of the world’s largest logistics companies. It does nearly $17 billion in revenue. 80% of its revenue is generated domestically in Japan. It conducts rail, trucking, ocean, package, airfreight and warehousing operations. Its airfreight express operations include its work as an agent for FedEx. During the World War II era, Nippon was a quasi-governmental transportation operation.
Pelican was established in 1958. It has 170,000 pickup/delivery locations throughout Japan. These locations are often convenience stores (7-11s) and liquor stores. A large part of Pelican’s business is consumer-based utilizing this network.1
Two thousand trucks per day move packages for Pelican and the largest sorting center is in Tokyo. Tokyo Central handles 20,000 packages per hour through its outbound terminal. A similar number is handled through its inbound terminal for distribution in Tokyo. The Tokyo pickups are handled first, and most trucks leave with them by 9 PM. By 1 PM, Tokyo inbound packages are arriving. By 6 AM, distribution trucks are leaving to run their routes in the greater Tokyo area. Tray style and shoe sorters are used in Nippon Central to handle dry packages.
All of it is a lot like UPS and FedEx sorts, but Pelican’s Terminal One (inbound) has a lower level which handles frozen and refrigerated packages. These shipments move in battery powered containers. The coldest are -20º (F).
Nippon’s International Container Drayage – Tokyo Harbor (OHI)
The OHI container pickup and distribution operation uses 220 pieces of power equipment. About 15% of the tractors used are company equipment. The rest are operated by independent contractors. The tractor/chassis ratio is about 2.5. All tractors operate global positioning satellite systems. Nippon has a coordinating software system in place to provide a paperless operation and keep trucks moving.
Export tonnage is about three times import tonnage. Nippon runs large contract warehousing operations for Canon and Epson. In addition, it has fresh fruit and vegetable operations at another facility.
In Japan, most shippers still tender many partial shipments which need cross docking. Nippon operates about 65,000 square feet of warehousing/cross dock facilities to handle consolidation and staging.
Nippon’s warehousing system is linked to its next truck management system. Freight for consolidation is barcode scanned in and out of facilities. In addition, Nippon uses “MaxLoad” to optimize the use of its export containers.
1 In North America, FedEx’s Kinko operations reflect this same model, but with a lot less operating density.
Sources: A&A Primary Research, http://www.nipponexpress.com/