Contents
HB WAY/Brand Promise | 2 |
Our History | |
At a Glance | 3 |
History of the HTS Group | 5 |
Value Creation Process of the HTS Group | 7 |
The HTS Group's Strengths | 9 |
Key Management Indicators 11
Our Future
Message from the President 15 Message from the CFO 21 Mid-term Management Plan -LOGISTEED 2021- 25 Special Feature -Employee Roundtable Discussion- 39
Value Creation Achievements
3PL Business (Domestic) 45 3PL Business (Overseas) 47 Freight Forwarding Business 49 Heavy Machinery and Plant Logistics Business 51 Response to COVID-19 53
Foundation Supporting Value Creation
Board of Directors and Executive Officers 55 Independent Director Dialogue 59
- Corporate Governance 63 HTS Group Sustainability 75
- Environment 79
- Social 85
Stakeholder Engagement/External Evaluation 89
Financial Data 91
ESG Data 93 Consolidated Financial Statements 95
Glossary 99 Corporate Data 101
The HTS Group's tools for information disclosure
Editorial Policy
The HTS Group has published the Integrated Report from 2020 in lieu of the conventional Annual Reports. This report introduces the Group's initiatives toward sustainable increase of corporate value to our stakeholders through the explanation of our value creation process and business model.
This report has been compiled with reference to "the International Integrated Reporting Framework" published by the International Integrated Reporting Council (IIRC) and "Guidance for Collaborative Value Creation" published by the Ministry of Economy, Trade and Industry.
Reporting period
The fiscal year ended March 31, 2021 (April 1, 2020- March 31, 2021 in general) However, recent activities are also reported in this report. "FY" refers to a financial period ended or ending on March 31.
Companies covered in this report
This integrated report covers Hitachi Transport System and the HTS Group (81 consolidated subsidiaries and 16 associates accounted for using the equity method) in principle.
Forward-looking statements
This integrated report contains forward-looking statements that reflect Hitachi Transport System, Ltd. and its Group companies' forecast, targets, plans, and strategies. These forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties, and various other factors that may cause Hitachi Transport System and its Group companies' actual results, performance, achievements, or financial position to be materially different from any future results, performance, achievements, or financial position expressed or implied by these forward-looking statements.
[LOGISTEED]: A word that combines LOGISTICS with Exceed, Proceed, Succeed, and Speed. It represents our determination to lead businesses to a new domain beyond the conventional logistics.
Details are available at the Company's website.
Hitachi Transport System aims for "LOGISTEED"
https://www.hitachi-transportsystem.com/en/logisteed-cafe/
Management
Philosophy & Brand
Under the corporate philosophy "to deliver high-quality services that will help make the world a better place for people and nature for generations to come," the corporate vision of the Hitachi Transport System Group is to become the most preferred global supply chain solutions provider for all of our stakeholders, including customers, shareholders, and employees, in the sophisticated, diversified and wide-ranging global supply chain, and strives to achieve sustainable growth by solving issues and creating "values" through various "collaborative innovation." In addition, we have organized the role and future direction of the Group as "HB WAY" with an aim to embody our Corporate Philosophy and Corporate Vision.
HB WAY
Shows the role and the "way" to move forward of the HTS Group and consists of "Corporate Philosophy,""Corporate Vision,""Guiding Principles," and "Success Drivers."
Corporate Philosophy
The Hitachi Transport System Group delivers high-quality services that will help make the world a better place for people and nature for generations to come.
Corporate Vision
The Most Preferred Global Supply Chain Solutions Provider
Guiding Principles
Compliance | We value "Basics and Ethics." |
Customer Focus | We deliver value to our customers. |
Innovation and Excellence | We strive for service excellence through collaborative innovation. |
Diversity and inclusion | We leverage inclusive diversity for holistic growth. |
Sustainability | We think and act responsibly as a global citizen. |
Success Drivers
"Gemba" Power, multiplied by Visualization
3 Key Goal Indicators | Safety, Quality, and Productivity |
3 Disciplines | Attention to Detail, Uncovering Problems, and Strong Sense of Speed |
3 Attributes | Customer Centricity, Teamwork, and Can Do Spirit |
Financial information | Non-financial information | |||
Investor Relations (website) | About Us (website) | |||
https://www.hitachi-transportsystem.com/en/ir/ | https://www.hitachi-transportsystem.com/en/profile/ | |||
Annual Securities | Business Report | Integrated Report | Corporate | |
Reports | Governance Report | CSR/ESG | ||
(Japanese version only) | ||||
(Japanese version only) | (Japanese version only) | |||
https://www.hitachi- | |||||
Summary of | Presentation Material | transportsystem.com/ | |||
Company Profile | en/profile/csr/ | ||||
Financial Results | of Financial Results | ||||
Brand Promise | Taking on the Future |
In a world of constant change, we are committed to pioneering new trails, | |
always looking ahead and energizing our society. | |
We build true trust with our customers, working tenaciously and charting a | |
collaborative future. We create and deliver innovative solutions, embracing | |
cutting-edge technologies. And we keep moving forward as one team, | |
fostering mutual respect and releasing individual potential. | |
Going beyond the conventional domain of logistics, we will bring innovation | |
to the future of business and people's lifestyles. | |
1 | Hitachi Transport System, Ltd. Integrated Report 2021 | Hitachi Transport System, Ltd. Integrated Report 2021 | 2 |
Our History
At a Glance
Capitalizing on our global network and abundant experiences, the Group meets customers' various logistics needs with our one-stop services of Smart Logistics consisting of 3PL business, Heavy Machinery and Plant Logistics business, and Freight Forwarding business, and aims to become the most preferred global supply chain solutions provider.
Resources-- Bases for Value Creation --(As of March 31, 2021)
Number of Companies*1/Locations*2 | Total Personnel *3 |
Locations | Human Resources |
98companies 752sites | 43,729 |
<_domestic3a_ 26="" companies="" 330="" _sites2f_overseas3a_="" 72="" 422="" sites=""> | <_domestic3a_ _282c_671="" _employees2f_overseas3a_="" _152c_058="" employees=""> |
Area of Logistics Center*2 | Number of Vehicles (Including Leased Vehicles) |
Warehouses | Vehicles |
7.53Mm2 | Total: 16,924 |
As a domestic 3PL market leader*, we provide comprehensive logistics services excellent in safety, quality, and productivity by taking advantage of our extensive network in Japan and overseas as well as abundant experience and know-how as a pioneer.
* Source: "3PL White Paper 2020" in September 2020 issue of monthly magazine LOGI-BIZ
Services-- Businesses & Solutions --
3PL business | Segment: Domestic logistics/ | |
Global logistics | ||
Value
We provide the optimal logistics services in supply chain. In automobile parts logistics, we meet the logistics-related needs of the automobile industry.
Heavy Machinery and Plant Logistics business | Segment: Domestic logistics/ | |
Global logistics | ||
Value
We provide transportation, installation, and setting-up services, etc. for heavy machinery and precision instruments.
History Our
Future Our
Creation Value
Achievements
<_domestic3a_ 5.27="" _mmc2b2_2f_overseas3a_="" 2.26="" _mmc2b2_=""> | Truck*4: | 3,671 | Forklift: | 5,981 | ||
Trailer: | 5,679 | Other*5: | 1,593 | |||
*1 Number of companies includes associates accounted for using the equity method. | ||||||
*2 | Number of locations and floor space of logistics centers exclude those of AIT Group and HTB-BCD Travel Group. | |||||
*3 Number of employees excludes associates accounted for using the equity method. | ||||||
*4 | Including tractors and vans | |||||
*5 | Including buses and passenger cars, etc. | |||||
Segment: Global logistics | |
Freight Forwarding business | |
Value
We propose an optimal transportation plan from various transportation modes including aircraft, ship, rail, etc.
OceanAir
TRANSPORTTRANSPORT
Supporting Foundation Creation Value
FY2020 Business Overview by Segment
Other services (logistics related businesses) • Information system development business • Sale and maintenance of automobiles business
Domestic logistics business (FY2020)
Revenues | Segment prot | |
(100 million yen) | (100 million yen) |
4,800 | 4,328 | 4,353 | 4,212 | 300 |
3,600 | 261 | 252 |
221 | 200 |
2,400
100
1,200
0 | 0 | ||||
2018 | 2019 | 2020 | (FY) |
* Effective April 1, 2019, the Group adopted IFRS 16 Leases.
Revenues | (Y o Y) -3% |
Revenues of domestic logistics business decreased by 3% year-on-year to
¥421,190 million due to a continued decline in volume caused by the spread of COVID-19 despite an increase in revenues as a result of contributions from newly launched projects and consolidation of PALENET CO., LTD. and Hitachi Transport System East Japan Distribution Services Co., Ltd.
Segment profit
Segment profit decreased by 3% year-on-year to ¥25,176 million due to a decrease in revenues despite improved productivity and a reduction in total costs.
Global logistics business (FY2020)
Revenues | Segment prot | |
(100 million yen) | (100 million yen) | |
3,000 | 150 |
2,558
2,198 | 2,163 | 120 | ||
2,000 | 103 | 90 | ||
1,000 | 71 | 65 | 60 | |
30 |
0 | 0 | ||||
2018 | 2019 | 2020 | (FY) |
* Effective April 1, 2019, the Group adopted IFRS 16 Leases.
Revenues | (Y o Y) -2% |
Revenues of global logistics business decreased by 2% year-on-year to ¥216,258 million as revenues did not return to the level of the previous fiscal year after being affected by the spread of COVID-19 and fluctuations of foreign exchange
rates, although showing a recovery trend in each region.
Segment profit (Y o Y) +59% Segment profit increased by 59% year-on-year to ¥10,340 million due to an increase in profitability of domestic and Chinese freight forwarding business between Japan and other countries and the effects of improved productivity and total cost reduction in each region despite a decrease in revenues.
Financial-Financial/Non Information
3 | Hitachi Transport System, Ltd. Integrated Report 2021 | Hitachi Transport System, Ltd. Integrated Report 2021 | 4 |
Our History
History of the HTS Group
History Our
Revenues
(100 million yen)
8,000 | Domestic logistics business | Listed on TSE | 6,524 | ||||||||||||||||
7,000 | Global logistics business | ||||||||||||||||||
Second Section | |||||||||||||||||||
Moved to TSE | |||||||||||||||||||
6,000 | Ratio of global logistics business (%) | in Jan. 1989 | 2020 | ||||||||||||||||
First Section | 2003 | ||||||||||||||||||
5,000 | 3PL | 1986 | in Sep. 1990 | 3,688 | |||||||||||||||
3PL | 3PL | ||||||||||||||||||
4,000 | 3PL | ¥161.6 | ¥443.5 | ||||||||||||||||
3,000 | ¥0.4 | billion | billion | ||||||||||||||||
billion | |||||||||||||||||||
2,000 | 3 | 6 | 12 | 11 | 13 | 21 | 22 | 25 | 33 | ||||||||||
1,000 | |||||||||||||||||||
19 | 64 | 233 | 254 | 353 | 578 | 636 | 933 | 2,163 | |||||||||||
0 | |||||||||||||||||||
(FY) | 1975 | 1980 | 1985 | 1990 | 1995 | 2000 | 2005 | 2010 | 2015 | 2020 | |||||||||
1950- | 1976- | 1986- | 1998- | 2007- | 2016- | ||||||||||||||
Future Our
Creation Value
Achievements
Supporting Foundation
Creation Value
Financial-Financial/Non
Information
Became independent by integrating transportation divisions
The Company was founded in February 1950 as a logistics subsidiary of Hitachi, Ltd. and commenced cargo transportation business. In 1967, the Company merged with Tokyo Monorail Co., Ltd. and another company, and changed its name to Hitachi Express & Tokyo Monorail Co., Ltd.
Expanded overseas
In 1976, our first overseas subsidiary was established in Singapore as the first step of the overseas strategy.
In 1984, we entered into the air cargo business against the backdrop of increasing air freight volume.
Launched 3PL business
Following the telecommunications liberalization in 1985, we launched TRINET service, the prototype of 3PL business, for customers in apparel industry in August 1986. Then we expanded the target fields to include building materials, medical supplies, and food, etc.
Entered into large-scale 3PL business with own assets
We entered into large-scale 3PL businesses with own assets by undertaking overall logistics operation of adidas Japan K.K. in 1998 and AEON Co., Ltd. in 2002. Especially, Kansai NDC completed in February 2003 had the largest-class capacity in the Company and cutting-edge equipment.
Expansion strategy through M&As
With the aim of expanding the industry platform in Japan and overseas network, we expanded our business through a total of 18 M&As by 2013 including the acquisition of a logistics subsidiary of Shiseido Company, Limited in 2007.
Expansion strategy through collaborative innovation
We have been promoting the expansion strategy through collaborative innovation and the creation of an ecosystem by forming alliance with SG Holdings Co., Ltd. and SAGAWA EXPRESS CO., LTD. in March 2016, AIT Corporation in October 2018, Hitachi Capital Corporation (currently Mitsubishi HC Capital Inc.) in December 2018, and A.P. Moller-Maersk in 2021.
5 | Hitachi Transport System, Ltd. Integrated Report 2021 | Hitachi Transport System, Ltd. Integrated Report 2021 | 6 |
Our History
Value Creation Process of the HTS Group
A business model to realize value creation of the HTS Group consists of a value chain comprising of task analysis, design for operation, operation and improvement of the customers' supply chain and structure to support it such as collaborative innovation, R&D, human resource development, and VC21 activities, with the HB WAY indicating how the Group should be and a path to take as the source of all values.
Using our strengths of "Ability to accomplish operation,""Advanced logistics engineering capability," and "Global network" as key drivers, we strive to reinforce our value chain to sustainably create economic, social, and environmental values to our stakeholders. We will contribute to SDGs through sustainable increase of corporate value.
SDGs (Sustainable Development | |
Goals) on which we focus for | P75-78 |
sustainable growth |
Our
Input | Business model |
Output
Outcome
History
Financial capital
- Stable nancial base
- Surplus funds to enable exible investments
Total assets | Cash and cash equivalents at end of year |
¥ 787.9billion | ¥ 104.8billion |
Manufactured capital
- Global business sites
- Transport vehicles
- Digital business platform underpinning LOGISTEED
Locations*1
Domestic 330sites Overseas 422sites
ity | ||||||||||||||||||||||||||||||||
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We support people's lives and assume a role as a social infrastructure provider by providing comprehensive logistics services with high level of safety, quality, and productivity.
Financial capital
ROE 11.8% | Return (TSR) | 208% |
Total Shareholder |
Credit rating (R&I) A
Manufactured capital
Use accumulated skills and expertise as reference models to build and manage new logistics centers and systems
Revenues
652.4
Stakeholders
Customers
Future Our
Area of logistics center*1
7.53Mm²
in 28 countries and regions
i | c | |
h | ||
o | ||
g | a | |
n | Cycle to | |
i | ||
O | n | |
accumulate | ||
knowledge |
3PL business
Procurement logistics services/Production logistics services/
¥billion
Intellectual capital
Employees
Value
Intellectual capital
- Patent (warehouse design/management system, etc.)
- Expertise (SCM optimization, safety, advanced logistics technology)
R&D expenses | No. of systems in operation |
¥ 670million | 499*2 |
Human and organizational capital
Strengths
l O Physical space | |||||||
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Virtual space (cyber)
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Distribution logistics services/Reverse logistics services/
Auto parts logistics
Number of | Number of attendees of data scientist |
patents held | training course (accumulated) |
78 | 72*4 |
Number of working hours saved by RPA*5 Approx. 6,600hours/month
Human and organizational capital
Employee engagement (Understanding Ratio of female |
Business partners
Creation Achievements
Foundation
- Diverse human resources well-versed in logistics
- Human resources who carry out the HB WAY
Total personnel | Education expenses per |
43,729 | employee (domestic) |
¥ 19,934 |
Social and relationship capital
- Trust relationships with stakeholders
- Business ecosystem to be built together with collaborative partners
Transportation partners (domestic) 1,400
Approx.companies
Natural capital
- Resources and energy that we use through logistics service with less environmental load*3
Total energy consumption (domestic) (crude oil equivalent)
1) Electricity consumption 2) Fuel consumption
44,461kl15,591klAbility to accomplish | Advanced logistics | Global |
operation | engineering capability | network |
- Structure to support value creation -
Collaborative | R&D | Human resource | VC21 | |
innovation | development | (Improvement activities) | ||
P33-34 | ||||
Sustainability management | P75-88 |
Corporate governance | P63-74 |
HB WAY | P2 |
("Gemba" Power, multiplied by Visualization) |
Heavy Machinery and Plant Logistics Business
Plant-related transport/Machinery and equipment transport/ Railway-related equipment transport/Precision instruments transport/ Various research equipment transport
Freight Forwarding Business
International air transport/International ocean freight transport/ International truck transport/International railway transport
P45-52
of goals/targets) *6 | managers |
74 | 4.9% |
[Negative outcome] Workplace accident index
Frequency rate 0.78 Severity rate 0.019
Social and relationship capital
Domestic share of | No. of customers |
3PL business | Over 20,000 |
14.4%*7 | companies (80 industries) |
Natural capital
CO emission reduction rate (domestic) (Scope 1 & 2) YoY -5.6%
[Negative Outcome]
Greenhouse gas emissions (domestic) (Scope 1 & 2) 113(thousand tons-CO)
Shareholders/
Investors
Local
administration
Local
community
Supporting Creation Value
Financial-Financial/Non Information
External environment | Decrease in labor population/consumers in Japan | Rise of protectionism and escalation of trade friction |
Increases in climate change risk and large-scale natural disasters | Increase in geopolitical risk |
*1 Number of locations and area of logistics centers exclude those of AIT Group and HTB-BCD Travel Group. | *2 Self-developed systems | *3 Including modal shift, use of eco cars, introduction of double-trailer trucks and sharing of facilities and equipment |
* As of March 31, 2021 |
Occurrence of big disasters and global pandemic | Advancement of digital technologies (5G/IoT/AI, etc.) | |
Expansion of EC market | Changes in environment surrounding the logistics business | |
*4 No. of attendees of in-house training to foster data scientist with advanced data analyst skills | *5 Robotic Process Automation *6 Total score of favorable responses in employee engagement survey | |
*7 Calculated by the Company using data in "Monthly Magazine LOGI-BIZ" |
7 | Hitachi Transport System, Ltd. Integrated Report 2021 | Hitachi Transport System, Ltd. Integrated Report 2021 | 8 |
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Hitachi Transport System Ltd. published this content on 01 October 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 30 September 2021 15:31:03 UTC.