Japan Post Co. and Sagawa Express Co. have said that they have reached a basic agreement to collaborate on parcel delivery operations to meet pandemic-induced growth in delivery demand.

The two companies said they are aiming to create sustainable logistics services by expanding their collaboration at a time of growing concerns about driver shortages.

At a news conference Friday, Japan Post President Kazuhide Kinugawa indicated that the two companies will build a mutually complementary relationship.

Kinugawa denied that they are considering forming a capital alliance at the moment.

Sagawa Express, a unit of SG Holdings Co., will start handling small parcels for postal delivery and transport them using the network of Japan Post’s Yu-Packet service.

The company will also use Japan Post’s EMS international delivery network to deliver overseas parcels from individual customers in Japan.

Japan Post, owned by Japan Post Holdings Co., will outsource the delivery of cold items, which has proved challenging for the company, to Sagawa Express.

The mutual use of delivery networks will start in stages beginning as early as next month.

The two companies will also consider joint operations in regional cities and cooperation on long- and medium-distance delivery.

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