Yamato Transport Co., Japan's leading door-to-door parcel delivery service provider, is making final arrangements to raise its base shipping fees by up to 20 percent in September, sources familiar with the matter said Tuesday.
The rate hike would be the first in 27 years, except for increases made in line with consumption tax hikes, and will affect both individual customers and corporate clients.
The move coincides with Yamato's efforts to curtail some of its services, such as by shortening the hours during which same-day delivery can be rearranged, amid a serious shortage of truck drivers and long hours worked by employees due to a surge in online shopping.
Yamato will use proceeds from the rate hike to improve its workers' conditions and services for its clients.
With rival parcel delivery providers similarly facing labor shortages, they may follow Yamato's lead once the company goes ahead with the rate hike.
Currently base shipping rates vary by parcel size, as well as place of dispatch and destination. For example, it costs ¥756 ($7) to send within the same region a parcel that weighs up to 2 kg and measures up to a combined 60 cm in length, width and height.
Yamato will raise the rates by between 5 and 20 percent, depending on parcel size, according to the sources. Under the plan, the rate for a package that now costs ¥756 to send is likely to be around ¥900.
Along with the shipping rate change, the company will review its contracts with major corporate clients to limit the volume of parcels it must handle. It has already begun talks with major clients, including Amazon.com Inc.'s Japan unit, and it may terminate contracts with clients that do not accept higher shipping rates.
The company delivered a record 1.87 billion parcels in the year ended in March.