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Business

E-commerce pushes Yamato's low-cost service to breaking point

Rate hike to fill financial hole could spur imitators

TOKYO -- Yamato Transport is raising delivery rates to undo the financial damage wrought by a deluge of unprofitable e-commerce orders, potentially breaking from a low-price, high-quality business model that has shined in Japan's deflation-plagued economy.

The leading Japanese shipper plans to raise base rates for retail customers 5-20% and seeks even steeper hikes for high-volume customers. The decision comes after the Yamato Holdings unit logged a record 1.87 billion in home deliveries in the year ended March, an increase of 30% from five years earlier, attributable mainly to a surge in internet shopping.

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