Annual Report 1999 (For year ended March 31,1999)

Business Review

 
Services Incidental to Marine Transportation

 

Comprehensive Logistics Services in Japan
  
The "K" Line Group companies operate loading, unloading, harbor transportation and other related transportation businesses at major ports in Japan. Daito Corporation, one of those companies, is engaged in a wide variety of transportation-related businesses, including container terminal, warehousing, and tug-boat operations, as well as shipping agency business in cooperation with other group companies. Ever since sweeping changes began to affect international transportation in the 1960s, the company has responded to steadily diversifying customer needs.
       Against the background of further deregulation of harbor transportation in Japan, competition is intensifying. Daito Corporation, which plays a key role in the "K" Line Group's logistics services, aims to increase customer satisfaction and operational efficiency.

 

Container Terminal Operations
and Transportation Businesses in North America
    
The "K" Line Group's land transportation network covers all areas of North America. "K" Line America, Inc., contributes to our containership services on trans-Pacific routes to and from North America as our agent in North America, as well as operating local land transportation agency businesses in close cooperation with its subsidiary "K" Line Canada, Inc. Moreover, International Transportation Service, Inc. plays a key role in our trans-pacific containership services by operating container terminals at major West Coast ports, including Long Beach, Tacoma (through its subsidiary Husky Terminal and Stevedoring, Inc.), and Oakland (through its subsidiary TransBay Container Terminal, Inc.), as well as a railway terminal in New Jersey (through its subsidiary The Rail-Bridge Terminal (New Jersey) Corporation).

 

Air Freight Forwarding
    
"K" Line Air Service, Ltd. is actively expanding overseas in the air-forwarding field. With a worldwide network covering 14 major countries (17 local subsidiaries, 47 offices), the "K" Line Air Service group of companies plays an important part in the "K" Line Group. Moreover, the company adequately meets increasingly diversifying needs in the area of group tours.
       Operating revenues from Services Incidental to Marine Transportation amounted to ¥134,219 million (US$1,113 million), and operating income for the term came to ¥650 million (US$5 million).

 

Information System
In 1997 "K" Line took the lead among oceangoing shipping companies in Japan by "right-sizing" the hardware of its information systems as a part of the "K" Line Re-engineering Program. The Company invested approximately ¥1.2 billion in its SR (systems re-engineering) Project, which compares favorably with the annual average of ¥800 million invested in the previous information systems. Furthermore, staffing requirements fell dramatically from over 70 (including personnel at subsidiaries) to less than 40, thanks to active outsourcing to outside service providers.
       It is crucial for Information System Division to keep the Information System working properly and assist our "Core Business" with an accurate grasp of customer needs and adequate project management. For this reason, we closely coordinate with overseas offices to streamline information flow throughout the world in order for us to provide better customer service as a global carrier.
       Now, we can enhance and upgrade information systems much faster than during the mainframe era. This can be attributed in large part to the establishment of a worldwide telecommunications infrastructure, as well as our adoption of de facto standards in various fields. Our Information System Division closely cooperates with the Sales and Operation Departments, the Finance & Accounting Department and the General Affairs Department in the creation of consolidated and efficient management systems, and, of course, with the Shipping Documentation & Traffic Department.
       We are running integrated telecommunications systems, which will enable us to share ship information on navigation and cargo operation information. We operate the system through six major bases in Richmond (U.S.), London, Singapore, Shanghai, Sydney, and Tokyo, and distributed headquarters functions to take advantage of regional management in the active market place. To meet global customer needs, we are now expediting the construction of a customer oriented service system based on Internet technology.