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Overwhelmed Yamato mulls exit from Amazon’s same-day delivery service

Kyodo

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 the heavy workload on its drivers, sources close to the matter said Friday.

The online retail giant offers the service to customers who pay a ¥3,900 annual fee, using Yamato to deliver parcels on the same day orders are placed. But the service is taking an increasing toll on Yamato’s drivers because of the high volume of nighttime deliveries.

Yamato will gradually reduce the volume of parcels accepted for the service and eventually withdraw from it completely — a move that could force online retailers to review their 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, to reduce the amount of parcels handled.

The company had been considering partly terminating contracts with major clients who refused to accept raised shipping fees or 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 a manpower shortage and an increase in online shopping, while struggling with growing costs for outsourcing its deliveries.

With 90 percent 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 hike.

According to Yamato, the company delivered roughly 1.8 billion parcels in fiscal 2016 amid a surge in online shopping.

But the number is likely to drop, with Yamato pulling out of the same-day service and Japan Post Co., the mail unit of state-owned behemoth Japan Post Holdings Co., expected to pick up some of it.