Japanese shipping giant Seino Holdings has announced the acquisition of a 70% stake in Mitsubishi Electric’s logistics unit for ¥60 billion ($380 million), as the trucking industry undergoes significant changes driven by driver shortages and new overtime regulations.
Mitsubishi Electric will retain a 30% interest in Mitsubishi Electric Logistics, down from its current 98%, maintaining involvement particularly in security-related logistics. This strategic sale will enable Seino to increase its driver pool and secure shipping business from Mitsubishi Electric, enhancing its operational capabilities.
Seino Holdings specializes in “less than truckload” (LTL) services, consolidating shipments from multiple customers, which often involves extensive travel and long hours for drivers. Unlike some competitors that subcontract deliveries to smaller firms, Seino handles approximately 80% of its shipments with in-house drivers and manages warehouses, offering integrated cargo management and transportation.
Mitsubishi Electric Logistics, which recorded sales of ¥136.6 billion for fiscal 2022, primarily ships components to factories and transports products like power semiconductors and defense equipment. This acquisition will provide Seino with a robust logistics framework and additional drivers to cope with increased demand and regulatory constraints.
The deal is part of a broader trend in Japan’s shipping industry, responding to government-imposed driver overtime restrictions that took effect in April, raising concerns about capacity limits. Companies are pursuing acquisitions to expand their workforce and streamline transportation networks. Recently, KKR-owned Logisteed announced plans to acquire Japan’s Alps Logistics, and SG Holdings, the parent of Sagawa Express, launched a tender offer for Chilled & Frozen Logistics Holdings.
Mitsubishi Electric, under pressure to improve governance following a 2021 quality control scandal, is restructuring to focus on growth areas such as power semiconductors and factory automation. The company is divesting noncore businesses, including exiting fields like car navigation systems and internal combustion engine injectors.
This acquisition not only strengthens Seino Holdings’ logistics capabilities but also reflects the industry’s strategic shifts to address operational challenges and enhance efficiency in a rapidly evolving market.
