Japan Post parcel tieup is delayed

Kyodo News

The government effectively delayed Tuesday the planned Oct. 1 integration of the parcel delivery operations of Japan Post Service Co., the mail arm of Japan Post Holdings, and private-sector trucking firm Nippon Express Co.

“It is impossible to approve” the integration under the envisioned time frame, Internal Affairs and Communications Minister Tsutomu Sato said.

Ministry officials said Japan Post Service’s preparations were inadequate for the Oct. 1 launch and customers would be inconvenienced.

Japan Post Holdings says the integration will improve profits in the highly competitive parcel delivery business.

The delay may fuel further calls for Japan Post Holdings President Yoshifumi Nishikawa to take the blame for the impasse, industry observers said.

Japan Post Service and Nippon Express set up the 50-50 joint venture JP Express Co. in June 2008 to prepare for the integration. Japan Post subsequently hiked its stake to 66 percent.

Japan Post Service’s Yu-Pack brand parcel delivery operations would be given to the venture.

But Sato said Japan Post Service should devise a business structure that could shield its overall mail delivery operations from possible poor performance in the competitive parcel delivery area. He has been urging them to re-examine the integration time frame.

In July, Japan Post Service pleaded with the postal ministry to endorse the Oct. 1 integration plan by revising its business plans for the 2009 business year, which ends next March 31.

But Sato demanded the postponement of the integration at a meeting with Nishikawa on Aug. 11.