Yamato Transport Co., Japan's leading parcel-delivery service, and Japan Post, the provider of "Yu-pack" service, are locked in a legal battle. Yamato claims that JP is setting prices at an unfairly low level while enjoying tax-exempt status and other privileges. It is ironic that some of the basic problems, or dilemmas, involved in postal-service privatization are coming to a head at the very time that the government is beginning to draft postal-reform legislation.
The dispute started when Japan Post, the government-controlled agency, signed a contract with Lawson, a major convenience store chain, which had an exclusive contract with Yamato. JP's aim is to expand its share in the profitable parcel-delivery market so that it can bolster its business foundations before April 2007, when mail service is scheduled for privatization.
Yamato, however, calls JP's deal with Lawson unfair not only because the prices are considered unreasonably low but also because JP is exempt from income and other taxes. In other words, the company does not think that JP should be able to use its various privileges to establish a strong foothold in the market before going private. Yamato seems especially displeased that JP is planning to deliver even sporting goods such as golf bags and ski boards -- an area in which Yamato has held a distinct advantage.