YAMATO CONSIDERS WITHDRAWING FROM AMAZON’S SAME-DAY DELIVERY SERVICE
Yamato Transport Co, Japan’s leading door-to-door courier firm, is considering withdrawing from its same-day delivery service for Amazon.com Inc to reduce its drivers’ heavy workloads, sources close to the matter said Friday.
A deliverer of Yamato Transport Co is seen under the company’s logo in Tokyo.Reuters photo
Online retail giant Amazon offers the service to customers who pay a 3,900 yen annual fee, with parcels delivered through Yamato on the day orders are placed. But the service has led to Yamato drivers increasingly being overworked, with a particularly high volume of nighttime deliveries.
Yamato will gradually reduce accepting parcels for the service and eventually withdraw from the service completely, a move that could force online retail firms to review their overall services, the sources said.
Last month, the group firm of Yamato Holdings Co said it will review contracts with major corporate clients, including online retailers, in its effort to reduce the amount of parcels it handles.
The company had been considering partly terminating contracts with major clients that refused to accept raised shipping fees or by deferring delivery days during peak periods.
Yamato plans to raise its base shipping fees by the end of September for the first time in 27 years to maintain service quality amid insufficient manpower and an increase in online shopping, while struggling with growing costs for outsourcing a part of its deliveries.
With 90% of its parcels coming from corporate clients including online retailers, Yamato had been offering them discounts based on delivery volume. But Yamato has already begun talks with major clients, including Amazon’s Japan unit, over the envisioned fee increase.
According to Yamato, the company delivered roughly 1.8 billion parcels in fiscal 2016 amid an increase in online shopping.
But the number is likely to be reduced with Yamato pulling out of the same-day service and Japan Post Co, the mail service unit of the state-owned Japan Post Holdings Co, is seen as overtaking part of the service.