Logistics & Beyond: Interview with Mr. Hidetoshi (Tosh) Sugimura, General Manager at Yabuki Kaiun Kaisha, Ltd01. March 2021
Yabuki Kaiun Kaisha, our esteemed member is Japan decided to speak with us in detail about this month’s Logistics and Beyond issue. While speaking to Mr. Hidetoshi Sugimura, the General Manager at Yabuki Kaiun, we get to know more about the company’s growth and its secrets to sustaining for almost a hundred years. What started as simple cargo handling and customs brokering agent, Yabuki Kaiun has grown to have branches not only in Japan but even have subsidiaries in other Asian countries.
In conversation with Sugimura San…
PL-Alliance: Yabuki Kaiun Kaisha has long been in the field of logistics, what has been its motivations and so far, what has the journey been like for Yabuki Kaiun Kaisha?
Sugimura San: Our mission is customer satisfaction and business contribution to our society and that motivates us to pursue a win-win situation. Furthermore, we have experienced and been through tremendous problems and tough situations, i.e., corruption of the metro, earthquake in the ’20s, WW2 in the ’40s, Nixon & Oil Shock in the ’70s, bubble-economy in ’80s, Osaka & Kobe quake in the ’90s, bubble corruption & deflation in the ’90s, Lehman Shock in ’00s, great east Japan earthquake in 10’s, and COVID-19 in 2020s. These in addition to ten to twenty typhoon damages every single year. These situations have trained us to stay alive and grow. We have successfully overcome these tsunamis of problems together with our family.
PL-Alliance: Yabuki Kaiun Kaisha, Ltd. has a rich history spanning over a century, as your company witnessed significant changes and growth in Japan’s logistics industry. What are the key moments for the company and some interesting developments through the years?
Sugimura San: We have stood the test of time starting from the shift in the manufacturing industries from Japan to South-East Asia and the deflation in the ’90s. The rapid growth in Asia combined with the high Japanese Yen did not even allow us to break-even with the labor costs.
We started as cargo handlers and customs house brokerage at Japan Major Port, but we sought other ways to feed vendors and our company. Yabuki Kaiun commenced NVOCC EXP/IMP and widen the agent network to “Keep Touching Cargo Longer” in the ’90s. That was one of the cornerstones of our current success. Other Japanese forwarders have also expanded to start subsidiaries abroad to increase business opportunities.
PL-Alliance: Given the vast experience of your establishment, can you tell us some of the recent projects handled by Yabuki Kaiun Kaisha, Ltd., and what were the challenges?
Sugimura San: You can read in detail about our latest projects here.
PL-Alliance: Japan is known for its intensive rail network which is also a preferred mode of logistics in the country. Is it common for the out-of-gauge cargo (OOG) also to be transported this way? What other options are preferred to move OOG cargo within the country?
Sugimura San: In short, OOG Cargo by railway in Japan is not feasible due to the following reasons: Japan is about 380,000 sq. km, (almost the same as Germany 360,000 sq. km) with just 18-19% of flat land. This means that over 80% of our land is a mountainous region. The total length of railways in Japan is approximately 20,000 km and stands 12th in the world. While Germany has a rail length of 40,000 km and ranks 6th in the World. However, we have four major gauge sizes (762 mm, 1067 mm, 1372 mm, 1435 mm) due to historical reasons. These various gauge sizes make through service incompatible. In addition to this, the sizes of the tunnels also vary at various locations depending on the terrain and geological conditions. Moreover, the Japanese railway lines are co-used (shared) by both passengers and freight liners. This means that the OOG cargo will definitely hit the platforms. These are the reasons we do not use the railway network for transporting OOG cargo.
We would rather choose a barge and a domestic vessel over rail transport. Railways are mainly used by the postal services or for small cargo.
PL-Alliance: Japan is also a long-time leader and a powerhouse in the supply chain industry. When compared to the United States, the Japanese logistics industry started late but has made great progress with regards to the application of technology. Why is the logistics cost of Japanese companies so low?
Sugimura San: It’s tough to answer this question, but in general, salaries and wages in our industry are relatively lower when compared to other industries. Our cultural background also believes --- Customer is the God. “Vender should obey and surrender to the Customer” was a normal business practice up until 20 to 30 years ago. The low costs actually created fewer success stories in the industry. There are no tips or tricks to keep our costs low. However, the atmosphere is gradually clearing. We try to explain our cost composition to our customers logically which helps them understand and is necessary.
PL-Alliance: As the pandemic continues to sweep across the world, what is the situation at Yabuki Kaiun Kaisha and what are the measures you have taken to recover and prevent any unforeseen trouble?
Sugimura San: We have now learned that we need to work anyway regardless of how COVID-19 comes, or other big issues go on around us. Therefore, our dogma is not PDCA (Plan-Do-Check-Act) but OODA (Observe-Orient-Decide-Act). Each one of us should think, examine, and adjust quickly. We share company targets and each team carves their way to success without waiting for detailed instructions. This means our employees need to be independent and more professional. We just keep trying to be better.
PL-Alliance: What are Yabuki Kaiun Kaisha’s plans for the coming years? Is there any advice you would like to share with our readers?
Sugimura San: For the time being, it is to stay calm during the pandemic. We do not expect huge growth but keep a stable operation in this tough situation where there are fewer containers and high demand for ocean freight. Squeezing profits and reorganizing to provide customer satisfaction is necessary because a friend in need is the friend indeed. Growth and success only come after we complete our missions!
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