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Business

Overworked Yamato Transport taps brakes on rising volumes

Japanese home delivery company to raise basic rates by average of 15%

Package volume at Yamato Transport rose roughly 30% over five years.

TOKYO -- Yamato Transport, the biggest Japanese home delivery company by market share, will seek to reduce package volume 4% in the current fiscal year by charging more for shipping as labor shortages crimp its growth.

Parent Yamato Holdings made the announcement Friday. The transporter delivered a record of around 1.87 billion parcels in fiscal 2016, making for a roughly 30% gain over five years. Amazon Japan and other online retailers have driven that growth.

During this spring's labor talks, Yamato's union insisted that personnel have been stretched to the breaking point. That prompted the company's decision to decrease home delivery volume this fiscal year by about 80 million parcels to roughly 1.79 billion.

Yamato will raise basic shipping rates by an average of 15% -- 140 yen to 180 yen ($1.26 to $1.62) depending on parcel size -- in September. This will mark its first increase for ordinary consumers in 27 years, expect for consumption tax hikes.

Internet sellers and other large-volume clients eligible for discounts will face an even steeper increase. Yamato is negotiating with 1,000 priority clients, and will cancel unprofitable contracts for clients that do not agree to higher rates.

The company will also request shipping adjustments during peak periods, and is rolling out a scheme in which multiple packages addressed to a single purchaser will be shipped together.

Management at the Yamato group will take responsibility for failing to pay overtime to tens of thousands of employees. Yamato Holdings Chairman Makoto Kigawa and President Masaki Yamauchi, as well as Yamato Transport President Yutaka Nagao and other executives, will see their monthly salaries cut by a third for six months.

(Nikkei)

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