Yusen focuses on automotive logistics and post-sales services in Europe
Yusen Logistics Europe, a subsidiary of the Japanese shipping giant NYK Group, has been making strategic moves to expand its presence in the automotive sector. Over the past 18 months, the company has enjoyed "good growth" in automotive, with the sector now representing around 20-25% of its €700m annual European revenue.
One of the key focuses for Yusen Logistics Europe is the growth of its freight forwarding and aftermarket logistics, particularly for Complete Knockdown Kit (CKD) production. The company is not interested in pure volume freight forwarding but is instead focusing on growing its freight forwarding capabilities.
Yusen Logistics Europe targets growth of around 25-30% in automotive over the next three years, a goal that seems ambitious given the current macro-economic climate. However, the company is confident in its strategy, with a significant portion of its automotive revenue in Europe coming from contract logistics (75%), air and ocean freight forwarding (12.5%), and aftermarket logistics (2.5%).
In line with its expansion plans, Yusen Logistics Europe has recently established a subsidiary in Turkey called Yusen Logistics Turkey Lojistik Hizmetleri Limited Sirketi, citing automotive as a customer group. This move is part of the company's broader strategy to manage its businesses across the wider continent rather than by country or regional groupings.
Beyond Europe, Yusen Logistics is also looking at opportunities in Russia and Turkey. The company has received several enquiries about using rail from Europe to Russia and to China using the Trans-Siberian railway.
Meanwhile, NYK Group, the parent company of Yusen Logistics, aims to more than double Yusen Logistics' annual revenue to ¥800 billion over the next seven years. This ambitious target is part of the company's efforts to recover from a loss of ¥33.2 billion ($42m) in the financial year 2012.
In a separate development, Yusen Logistics won a contract earlier this year to distribute aftermarket parts for BMW in Benelux. This win underscores the company's growing strength in the European aftermarket, a sector that Storey, the CEO of Yusen Logistics Europe, believes will present more opportunities for the company.
Russia's industrial policy decree 166 is expected to significantly change the trade flow of importing components from Western Europe to support production in Russia over the next 18-36 months. This shift could open up new opportunities for Yusen Logistics in the Russian market.
However, Yusen does not appear willing to trade revenue for profit. The company is instead putting emphasis on value-added activities for automotive that would dovetail with freight forwarding and NYK's shipping assets. This strategic approach is expected to help Yusen Logistics maintain its profitability while achieving its ambitious growth targets.
