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Business Deals

Nippon Express teams with China's top port operator

Deal helps expand Japanese company's footprint to the country's interior

A Nippon Express driver and truck at one of the company's domestic facilities.

TOKYO -- Nippon Express has agreed to partner with Shanghai International Port Group in an effort to broaden its reach in China beyond the big coastal cities.

Shanghai International Port is the largest port operator in China and manages the Port of Shanghai, the world's busiest port by container volume. Concrete business collaborations will kick off as early as this year.

By working with SIPG Logistics, a unit of the Shanghai-based company, Nippon Express will gain access to the group's large warehouses and ships that ply the Yangtze River.

The ships can carry larger volumes of cargo than chartered trucks, which are currently the main mode of transport to inland areas. Ships take about two weeks to travel from Shanghai to the inland city of Chongqing, about five times longer than trucks, but cost only one-third as much.

Nippon Express has until now mainly served Japanese companies operating in China, such as automotive manufacturers. As a result, its logistics operations there have focused on cities. The tie-up will expand its reach to all of China, allowing the company to serve more local customers.

As the logistics market hits a ceiling in Japan, Nippon Express is stepping up its overseas business with a focus on Asia.

The Tokyo-based company will offer its logistics networks in Europe and emerging markets under the partnership to help boost exports of products made in China. Likely customers include home electronics and semiconductor makers.

Nippon Express will also assist in procuring and transporting products made in Japan for an online mall run by Shanghai International Port. The virtual mall caters mainly to the affluent class in Shanghai, who favor Japanese products.

For its part, Shanghai International Port hopes to expand its Japanese customer base.

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