Seino Transportation Company, Ltd.

Seino Transportation Company, Ltd.

1 Taguchi-cho
Ogaki
Gifu 503
Japan
(584) 81-1111
Fax: (584) 75-3366

Private Company
Incorporated: 1946
Employees: 14,580
Sales: ¥ 304.35 billion (US$2.41 billion)
Stock Exchanges: Tokyo Nagoya

Seino Transportation Company, Ltd. is a physical distribution company offering information and sales services tailored to both corporate and individual needs. It is the third-largest physical distribution trading company of the eleven in Japan, as well as the largest privately owned freight transportation company in Japan. Seino also provides door-to-door parcel transportation, haulage on consignor specified routes, household removal services, and air freight forwarding. The company has interests in such related areas as auto dealerships, real estate, and storage management. In 1991, Seino held interest in 63 companies, with an international scope extending to twelve countries, including the U.S., Brazil, Germany, and Malaysia. The company reported moving up to 33,000 tons of freight daily by land, air, and sea.

The seed for Seino’s remarkable growth was planted February 11, 1930, in Gifu Prefecture by Rihachi Taguchi, who owned a used truck. He called his new company Taguchi Automobile and likened the company’s growth to his favorite flower—the Amur adonis, which in Japan is a symbol for resiliency. Taguchi’s motto in life was “the Amur adonis plant grows strong in the field and blooms no matter how many times it has been stamped on.” Over the course of the next two decades, this motto would often be tested as the result of intense competition as well as natural and political obstacles.

Initial success allowed Taguchi to open an office in 1933 in Ogaki—a centralized location that would continue to anchor Seino. By 1941, Taguchi’s company boasted twenty trucks, 50 employees, and a new name—Seino Truck Transportation Co. However, in 1942, as World War II became imminent, Seino and fourteen other companies were required to merge by government order under the name Seino Transportation Co., Ltd. For the next four years, the company was responsible for wartime transportation.

On November 1, 1946, freed from the unified operating plan, Taguchi redirected operations to civilian freight transportation, under the name Suito Sangyo Co., Ltd. Two years later, Taguchi reclaimed the name Seino Truck Transportation Co. for his firm. Taguchi also began the practice of growth by acquisition, obtaining the first of what would become many Seino cargo handling shops. At the same time, Taguchi pursued important licensing agreements with the Japanese government. His strategy was to obtain as many long-distance (route) licenses and local (area) licenses as possible. Both kinds of licenses are considered valuable in Japan, because they define the area a company is allowed to service. Seino received its first significant route license from the Minister of Transportation in 1948, allowing it to enter long-distance operations with a 58 kilometer route from Ogaki and Nagoya. Licensing for longer routes soon followed, helping Seino to assume a leadership role in carving out trucking routes, despite postwar fuel and equipment shortages and poor road conditions. Overnight carrier service in three of Japan’s major economic regions—Kanto, Chubu, and Kansai—was instituted in 1954.

By the time Seino marked a decade of operation in 1956, it had 23 offices, employed 1,197 people, and operated 397 vehicles. In 1957, the company expanded into real estate, founding what is now known as Asahi Real Estate Facilities Co., Ltd. Steady growth during Seino’s second 10 years of business included the 1959 construction of the Tokyo Terminal and the introduction of routes from Tokyo to Sendai and Shiogama. Seino also formed its own health insurance cooperative and mutual aid association and acquired five transportation companies during these years. In 1966, corporate offices were moved to their present location at 1 Taguchi-cho in Ogaki.

Though land transportation made up the major share of Seino’s operations, air freight forwarding became the focus in the company’s next growing phase. Agreements with Japan Air Lines, All Nippon Air Lines, and Toa Airlines were formed, though in 1969 they were dissolved in the face of rapidly expanding land routes and demands for greater service that led Seino to form its own air cargo department.

A library donation program Taguchi started in 1967 evolved into the Taguchi Fukujukai Foundation. Named for the Amur adonis plant, the foundation is dedicated to benevolent works, such as college scholarships for fatherless children and the promotion of cultural activities. To date, the Taguchi Fukujukai Foundation has also sponsored such community programs as women’s volleyball, youth kendo tournaments, and marathon relays, by providing scholarships and donations. Another Seino motto, “Business progress starts with people,” was applied not only to company operations but also to social activities for employees.

In the early 1970s Seino continued to expand its sphere of influence, aggressively pursuing new routes and licenses. In 1970, Seino established the trucking industry’s first complete link of Japan’s mainland. The licensing for main and secondary routes between Sendai and the mainland’s northernmost city, Aomori, was the final step in uniting operations that extended as far as Kumamoto, located in the island’s southern region. The air service stretched Seino’s reach to New York and Brazil, where satellite offices were established. In 1971, Seino was listed on the second section of the Nagoya Stock Exchange.

New goals set in 1972 targeted 1980 as the year Seino would achieve a ¥ 100 billion year. The company prepared by reviewing and improving its domestic truck network and expanding its services—this time delving into marine delivery. By the year’s end, Seino was listed on the first section of the Nagoya and Tokyo Stock Exchanges.

Seino responded with confidence when faced with the first of two oil crises during the 1970s. By 1974, Seino secured the services of Yoyoteiki Cargo Co., Ltd. in Korea, and in this way entered a new realm of container cargo carrying service on an international scale—without giving up its lucrative trucking business. An agreement with Hokkaido Forwarding strengthened services in Hokkaido, and the Hinomaru Truck Co. joined other subsidiaries in the Seino Group. In 1976, the year Seino entered its third decade, it claimed ¥2.72 million in capital, 8,251 employees in 119 offices, and 4,611 vehicles. The Kaga Forwarding Co. and three transportation companies in the Hokuriku district joined Seino in 1977, the same year door-to-door service was instituted.

Though growth was still a priority, efficiency loomed larger in 1978, with the beginning of a second oil crisis. Licensing of the Nigata to Hirosaki route—a 450 kilometer drive—cut delivery time from Chubu and Kinki to Tohoku and Hokkaido to two days. There were other ways Seino tried to improve efficiency, notably with the opening of a branch office in Osaka and the introduction of Japan’s first two-story automatic sorting machine.

In 1980, Seino commemorated the 50th anniversary of Rihachi Taguchi’s original transportation company, Taguchi Automobile. This year also marked the beginning of a transition in leadership from Taguchi to his son, Toshio Taguchi, who had been with the company since graduating from the Keio University Department of Law in 1955. After the younger Taguchi became president in 1981, Seino reorganized and renamed its subsidiaries. The change would delineate Seino’s transportation services, all under the umbrella name Kangaroo. For example, the commercial goods carriers delivering from plants and manufacturers to consumers were called Kangaroo Express Service; overnight deliverers of items weighing less than ten pounds were dubbed Kangaroo Mini Package Service; transporters of seasonal gifts and perishable items were grouped under Kangaroo Door-to-Door Service. Similarly, Kangaroo Moving Service identified Seino’s residential moving and furniture transportation arm. Separate Kangaroo subsidiaries covered air cargo and marine transportation services.

The younger Taguchi’s new role also coincided with the addition of an Aomori to Sapporo route, completing Japan’s first cross-country operation network by a single company. Success for Seino, though not overnight, was consistent enough that by the time company founder Rihachi Taguchi died on July 28, 1982, his one used truck had metamorphosed into a company with ¥6.15 billion in capital. Taguchi was posthumously elevated to the position of honorary chairman.

Toshio Taguchi, following his father’s example, set a course for further expansion. In 1983, he announced plans for Seino to become a comprehensive physical distribution trading company. Seino issued $50 million in warrant bonds to fund the venture. Seino Shoji Co., Ltd. (today Seino Trading Co., Ltd.) was founded in the Seino Group and Komaki Distribution Warehouse opened—important steps toward Taguchi’s goal. Kangaroo Door-to-Door Service and Kangaroo Mini Service sales began in 1983, serving Japan and the U.S.

Another milestone was the implementation of computer systems in all offices linked to INTEC, a major information processing service company devoted to highly developed business communications. This was the foundation for Seino Information Service Co., Ltd. in 1984. The computer systems tapped into a Value-Added Network (VAN), helping Seino streamline operations and offer more specific delivery services. One such service, Seino Book Express, would pick up a book from anywhere in Japan and deliver it within three or four days to any other point in the country.

Seino also boldly moved into direct sales, bypassing stores. Seino’s largest terminal, able to handle 26,000 items of general cargo per hour, opened in Tokyo. Seino not only instituted overnight air carrier service in Tokyo, Nagoya, and Osaka, but it also formalized a European cargo service agreement with air carrier Helmut Delhey of West Germany. In 1986, Seino joined IBM Japan’s Network Management Service, taking advantage of VAN-to-VAN communication. The company also celebrated its 40th year in operation in 1986, posting ¥6.9 billion in capital. By this time, Seino was entrenched in Japan’s market, and claimed 150 offices, 11,461 employees, and 8,343 vehicles.

Seino once again led Japan’s transportation industry by completing a 34,273 kilometer cross-country route in Japan in 1987. A bull market spurred Seino to issue ¥40 billion worth of convertible bonds and 70 million U.S. dollars of warrant bonds in the late 1980s. Seino was restructured and recommenced under the new management of Toshio Taguchi, who became chairman, and his brother Yoshikazu Taguchi, who became president. Seino also instituted several changes to its American operations: the U.S. division, Seino Cosmo America Inc. was renamed Seino America, Inc. in 1987, a precursor to plans for nationwide expansion; and Seino Development Co., Inc., a real estate leasing and management business, was established in Los Angeles.

Seino moved its sales headquarters to Tokyo in 1988 and continued to acquire transportation entities—including one in Australia—while diversifying. Seino Advertising Co., Ltd. (today Asahi Agency Co., Ltd.) and Shinko Printing Co., Ltd. (today’s Asahi Create Co., Ltd.) joined the Seino Group in 1988. Seino Do Brasil Armazens Gerais, Ltd., a storage maintenance business, was established in Sao Paulo, Brazil. Seino also added a Washington, D.C.-based custom brokerage house, Gladish & Associates, to its roster. At the end of the 1991 fiscal year, Seino announced a 12.6 percent increase in operating revenues over 1990.

In 1990 Seino developed a new logo which shows a leaping kangaroo, with baby in pouch, above a depiction of the word Seino that includes a star in the upper right quarter of the O. The kangaroo is said to symbolize warmth and reliability, while the star is a reminder of Seino’s 24-hour availability.

Seino’s 1991 annual report noted that unexpected credit restrictions, along with the Gulf crisis, hampered but didn’t prevent growth. The expanding Japanese economy and strong demand from Japanese consumers created double-digit increases in virtually every category, the largest of which was a 23.9 percent increase in consignor routes. Concerns about air pollution and the variable oil supply spurred Chairman Taguchi to suggest a shift in transportation modes toward rail, air, and marine service to reduce the need for delivery by truck. In 1991, Taguchi announced a goal of ¥ 1 trillion for the 1996 fiscal year.

Seino’s main challenge is to continue competing with the same or a better level of intensity. The pressure to offer a better product is constant, due in part to the entrepreneurial nature of the Japanese business climate. New competitors can develop and gain strength very rapidly to challenge successful businesses. What challenges the competition doesn’t provide, the consumer does. Affluence allows both individuals and companies to demand more and better services. For Seino, safety from these presssures may be found in two areas: diversification and continued expansion into the world market.

Principal Subsidiaries

Information and Sales Group — Seino Information Services; Japan Logistics Development; Seino Distribution Systems; Seino Trading; Seino Sangyo; Gifu Hino Automobile; Toyota Corolla Gifu; Toyota Auto Gifu; Toyota Vista Gifu; Toyota Home Gifu; Asahi Sangyo; Seino Engineering; Rentalease Asahi; Asahi Travel Service; Asahi Highland; Seino Family; Asahi Create; Asahi Agency; Seino Development; Seino Do Brasil Armazens Gerais Ltd.; Pacific Seino Asahi Aviation, Inc. Transportation Group — Hokkaido Seino; Iwate Seino; Miyagi Seino; Fukushima Seino; Kanto Seino; Saitama Seino; Tokyo Seino; Kanagawa Seino; Nohi Seino; Hokuriku Seino; Kaga Seino; Enshu Seino; Mikawa Seino; Tokai Seino; Seino Forwarding; Mie Seino; Nara Seino; Chugoku Seino; Hinomaru Seino; Shikoku Seino; Showa Seino; Sengoku Seino; Okinawa Seino; Seino Cosmo Express; Seino America, Inc.; Gladish & Associates; Univer-Seino Transportes E Cargas Ltd.; Seino Europe GmbH.; Seino-Van Ommeren Transport; Seino Express; Seino Tokyo Express; Seino Kanagawa Express; Seino Hokuriku Express; Seino Nagoya Express; Seino Osaka Express; Seino ST Services. Inc.; Hiroshima Shokuryo Co., Ltd.; Suito Taxi Co., Ltd.; Takuma Seino; United-Seino Transportation (Malaysia) Sdn. Bhd.; Seino Hokkaido Express, Inc.

Further Reading

Gschwandtner, Gerhard, “Marketing in Japan: A Blueprint for Success in a Land Full of Surprises,” Personal Selling Power, January/February 1992.

—Peg McNichol