The news that Manchester United has claimed a record-breaking 19th league championship will please Alex Okamoto who is big fan of the Red Devils. But perhaps more significantly he sees lessons in the way Sir Alex Ferguson has managed the club to a consistent record of success over 24 years.
Now, as head of the newly formed Yusen Logistics Europe, Okamoto is charged with meeting some challenging targets of his own in the face of competition from the established giants of the European market.
He has a strong starting point in the UK where Ian Vietch, who becomes UK managing director in the new structure, has built a business with sales of more than £200m. Okamoto says: “As the UK market represents the largest individual share of our logistics business in Europe, the integration of NYK Logistics and YAS in the UK marks a critical stage in the overall European process.”
Yusen Logistics was unveiled in October last year as the latest player to join the global giants of third party logistics. The business is being created from the merger of Yusen Air Service and NYK Logistics. When complete in April next year, it will be an integrated global logistics provider with some 16,000 employees, 400 locations, and two million square metres of warehouse space, with a global network that spans ocean, land and air.
Yusen Logistics’ results for the year to 31st March 2011 show net sales of 160.8bn yen (£1.2bn) and operating profit of 4.9bn yen (£37.6m).
Yusen was founded in 1955 as Kokusai Ryoko Kosha handling air cargo. It became part of the NYK group four years later. The subsidiary was named Yusen Air Service. In 1983 NYK set up a logistics department of the Harbour division as well as establishing Japan Intermodal Transport (JIT) in Japan, mainly handling ocean freight forwarding.
The logistics network was expanded globally during the 1980s either through takeovers such as UCI Logistics in the UK or the formation of subsidiaries such as New Wave Logistics.
NYK Logistics came into being in the UK in 2004 following the mergers of the UCI and New Wave businesses here.
Yusen Logistics was officially launched in the UK in April to provide a “one-stop shop”, offering warehousing, distribution, air/ocean freight forwarding and supply chain management in one package.
Okamoto points out that the Yusen and NYK Logistics businesses are broadly complementary but there are overlaps where there is a danger of having the two competing against each other. So it makes sense to create one integrated logistics company. As a global company, Yusen Logistics can provide solutions ranging from stand-alone operations to international supply chains. In Europe, most of the national operations have now been integrated. The big outstanding market is Germany where for technical reasons the merger is scheduled for October.
The new business has set itself some tough targets. It has just published its mid-term business plan entitled “Go Forward, Yusen Logistics”. It is looking for a threefold growth in business by 2017. By 2013 it wants to handle one million teu in its ocean freight business and half a million tines of air cargo.
Much of the focus of the group globally is on the emerging markets notably China, India and South East Asia. Okamoto points out that one of the reasons for choosing Yusen as the name for the merged group was the fact that it was the stronger brand in those key markets.
With more and more companies sourcing in China, he sees opportunities to expand Yusen’s role in the management of global supply chains.
Yusen has particular strengths in a number of markets including automotive, consumer electronics, retail, pharmaceutical and environmental equipment. In the immediate future, says Okamoto, the approach is to focus on the existing customer base and offer additional services.
The company has also been investing in technology to facilitate global supply chain operations notably track and trace technology to provide visibility across the supply chain.
The group is a market leader in consumer electronics in Europe as well as being particularly strong in the automotive sector. It is also expanding its operations in the retail sector and pharmaceuticals.
In Europe, the commonly held view of China is as a manufacturing location producing goods for markets in Europe and America. But, Okamoto points out that increasingly it is developing as a consumer market. In particular, motor manufacturers are starting to view China as a major market. In fact, some European manufacturers reckon that China could come to represent as much as 50 per cent of their sales. Yusen is increasingly handling deliveries into the country for the major brands. Work is also going on to expand the business into new markets. Looking ahead, Okamoto sees opportunities for growth in Eastern Europe as well as in Turkey and the Black Sea region. Yusen has already set up an office in Turkey and is looking for expansion. It’s a market of almost 75 million people, Okamoto points out, and it provides an interface to countries further east.
Alex Okamoto is managing director of Yusen Logistics Europe.
He joined NYK in 1983 when it first formed its logistics department.
l In the 28 years since then he has spent 24 in the logistics businesses 14 of them on overseas assignments.
Assignments have included Hong Kong, London, Amsterdam and Manchester.
He spent several years running the Yusen Air Service operations in Manchester.