Various industries are focusing on the improvement of work-life balance of employees through labor-saving and digitalization, and the improvement of productivity per person due to the rapid decline in working population brought about by the declining birthrate and aging population of Japan. In the logistics industry, while the volume of packages in the e-commerce market is continuously growing, it is becoming more difficult every year to secure human resources such as drivers. The Group is also working to reinforce its services and promote automation and labor-saving in its operations through the use of technology in order to continue stably providing infrastructure in the form of logistics.

Specifically, we are actively engaged in the introduction of technology to strengthen services through Group coordination utilizing initiatives such as GOAL®, implement front and back-office business reforms, and strengthen IT governance.

SG Holdings formulates DX strategies with Sagawa Express and other Group companies responsible for planning DX measures in their individual fields of expertise. In the execution of DX measures, the relevant systems are built by SG Systems, a company with a long-established track record in the fields of logistics and information technology.

Moreover, for both strategies and the execution of these strategies, we proactively form alliances with a wide variety of partners.

Sagawa Express is building its Transport Management System (TMS) into a new pillar of business. Aimed primarily at corporate customers, TMS is an innovative system which comprehensively manages a broad range of transport services needed by corporate customers, including deliveries of special items and items too large for normal express package delivery services, JIT deliveries, joint deliveries, and small-lot charter services.

We have created the TMS Platform matching packages with vehicles to further expand the TMS business utilizing the network of Sagawa Express and partner companies spanning locations throughout Japan. The TMS Platform makes it possible to increase the matching rate of packages and drivers, increase the operating rate of partner companies and improve the capacity fulfillment rate of trucks, and we aim to work as one with partner companies to create highly efficient transportation infrastructure.

Sagawa Global Logistics operates an EC Platform utilizing logistics robots in the X FRONTIER next-generation large-scale logistics center. Automated Guided Vehicles (AGV) such as automated conveyance robots, robot storage systems, and automated packaging systems have been installed, resulting in labor saving of approximately 50% compared to facilities of the same size. In the shipment flow after sorting, Sagawa Express (domestic) and SGH Global Japan (overseas) work together within the facility, enabling direct linkage of transportation in Japan and overseas.

Furthermore, it is also possible to provide work quality equivalent to major companies with facilities even when handling small volumes of freight due to using pay-as-you-go system not requiring up-front investment in facilities or fixed expenses such as space usage fees. Through the creation of a logistics platform facilitating the commencement of e-commerce as a start-up or a new business, we will contribute to improving convenience for both e-commerce business operators and consumers.

Sagawa Express is engaged in the digitization of invoice information such as delivery addresses and time designation, and the optimization of delivery routes utilizing AI. Drivers spend tens of minutes determining the order of deliveries, loading packages and rearranging invoices with consideration for addresses and designated times while looking at the packages in the area for which they are responsible. Improving the efficiency of this task was impeded by handwritten invoices that account for around 10 percent of the total. Using AI-OCR* to digitize the information in these handwritten invoices enables AI-based rearrangement of the optimal order of deliveries and reconfiguration of routes. This is also expected to operations such as loading of accompanying packages and rearrangement of invoices.

Presenting optimized delivery routes enables drivers with little experience in an area such as new employees and support staff to efficiently provide a uniform level of delivery service. This can also contribute to reducing the workload of new drivers, the creation of a driver support system in busy periods and assisting the elimination of driver shortages.