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President Encourages Employees to Demonstrate Courage and Conviction for Change in a New Era

NYK president Tadaaki Naito marked the 131st anniversary of NYK???s founding by addressing company employees at the NYK head office in Tokyo on October 3. A summary of his speech is provided below.

Creativity and Ingenuity 

This year, the Olympic and Paralympic Games were held in Rio de Janeiro, and the accomplishments of athletes from every country inspired people worldwide. Among the many spectacular performances at the event, the success of the Japanese men???s 400-meter relay team deserves special mention.

Unlike the members of the Jamaican and U.S. teams, who had all individually clocked times of less than 10 seconds in the 100-meter race, none of the Japanese team members had a sub-10 second time, nor did any individually qualify for the 100-meter final. Despite that, amazingly the four of them won the silver medal, finishing the relay with a time of 37.60 seconds. The team???s brilliant performance has been attributed to both skill and teamwork.

In order to compete against countries that have faster runners, Japan???s team closely verified the abilities, strengths, and weaknesses of each of its members. Recognizing that it was inferior in terms of running speed, the team focused on the baton pass, applying creativity to differentiate and gain a distinct advantage over the other teams.

In the same way, by continually applying creativity and ingenuity in response to changes in the shipping industry, NYK followed its own unique path under urgent circumstances. There have been many such cases throughout the company???s history, and I would like to highlight some illustrative examples here.

Exploring Our Creative Roots

I will start by explaining how the company???s trading and shipping operations were originally separated. The time was around the dawn of Japan???s shipping industry during the days of Yubin Kisen Mitsubishi Kaisha, before NYK was established. During those years, shipping firms in Japan purchased cargo at ports of loading and sold it at ports of discharge. Yataro Iwasaki separated the trading and shipping operations in order to specialize in shipping services based on freight rates, just like steamship companies in other countries at the time.

This was the outcome of having an innovative mindset and putting the idea into action. And this was not the only case. At the time, money exchangers had been serving as a financial network, but for shippers, it was necessary to separately pay the freight to the shipping line, and collect the payment for the cargo from the money exchangers. Aiming to improve this situation, Iwasaki proactively initiated a bill of exchange procedure, an innovation that attracted the business of more shippers, which, in turn, boosted the market share. Yataro Iwasaki was a man of ingenuity, and our company???s distinct history originated by differentiation through his creativity.

A second example occurred later on in the 1960s. The liner trade was the main business of the NYK Group, but the company overhauled this business model by taking determined steps to establish specialized shipping businesses designed for transporting coal, wood chips, cars, oil, and LNG to suit Japan???s period of rapid economic growth, which was just beginning. Foreseeing how the times would change early on, NYK responded flexibly and tactically, commissioning such new vessels while also giving importance to maintaining the company???s reputation among customers as a trustworthy and dependable partner. From that time onward, NYK was able to ride out the storms resulting from changes in industries and switchovers to different energy sources.

The third case I would like to discuss happened in more recent years, when breakdowns in shipping conferences led to intensifying competition in the liner trade sector. In response to this shift in the operating environment, we took the initiative of launching a logistics business. We have since been able to expand this business by applying creativity and ingenuity in various ways to meet customers??? needs, which are becoming increasingly sophisticated and complex. Over 20,000 employees in over 40 countries worldwide currently work in logistics operations managed by Yusen Logistics Co. Ltd. The growth of this business has helped the NYK Group secure stable earnings.

Finally, let me turn to the most recent example, one that is much smaller in scale. We established Symphony Creative Solutions Pte. Ltd., a start-up company in Singapore, to differentiate our company from others by providing products tailored to customers??? needs, making use of our creativity and ingenuity by leveraging IT. The process involves a cycle of releasing products as quickly as possible, monitoring the responses of users, quickly releasing revised versions, and making improvements based on feedback from users in the market. We initiated this cycle after recognizing that changes in the business environment cannot be addressed through the conventional approach of taking time to develop a perfect product prior to its release. Moreover, we are working with a group of partners, each of which has specialized expertise, to carry out the cycle quickly and comprehensively.

If we consider the examples I have discussed, I think it is clear that the NYK Group has been making progress up to the present day by applying the group???s creativity and ingenuity in pursuit of its own distinct path, just like the Olympic relay team I mentioned at the outset. While we, too, have our own strengths and weaknesses, we have also been highly attuned to the changing times and shifting needs of customers.

 Setting a Course for a Brighter Future

There are also formidable rivals in the shipping industry competing against the NYK Group. We also must beat out new players from emerging countries, which are likely to rapidly grow more competitive in the future. Furthermore, as the spread of the Internet completely transforms peoples??? lives and best practices in the industry, we will have to square off against new competition from other industries, such as the IT industry. Therefore, it goes without saying that more than ever before, we must be on guard, refine our creativity and ingenuity, and differentiate our businesses and services.

The world???s population is forecast to steadily increase from the current level of about seven billion to almost 10 billion by 2050. A growing population means more international shipments of energy, food, and all kinds of other cargo. By transporting cargo, we provide a source of stability for the global community, and engage in work that helps people around the world pursue their dreams of happiness and prosperity. But the path to realizing dreams is very steep, with many bumps along the way, we may need to carry out reforms, which could be painful at times, in order to ensure the future growth of the NYK Group.

Recognizing that everyone including me feels anxious about trying new ways or making changes, we need to be bold enough to implement them. To ???overcome the raging seas??? of today, let???s set a course for a brighter tomorrow and adapt the NYK Group to the days ahead with both courage and conviction.