Nippon Steel to Improve Transport Efficiency

Nippon Steel improves steel transportation through further tie-up with alliance partners. The firm considers joint allocation of domestic vessels with Sumitomo Metal Industries and Kobe Steel while the firm tries to reduce transportation cost with Toyo Kohan and Sanyo Special Steel. The firm seeks better competitiveness by efficient transportation through further cooperation with group companies and alliance partners when ocean and land transportation cost increases under higher fuel cost and tight ship supply. The firm already operates 6 vessels jointly with Sumitomo Metals and Kobe Steel since December 2004 as a part of the alliance. They consider increasing the vessels for further efficiency. Nippon Steel already agreed with Toyo Kohan to assume ocean transport for Toyo Kohan to reduce cost as a part of the partnership. Nippon Steel also considers assuming ocean transport for Sanyo Special Steel. Domestic charter price of vessel with 1,600 tonnes of capacity, which is used for steel distribution, increases from bottom in fiscal 2002 ended March 2003. The price of vessel fuel of A heavy oil increased by 70% to 63,000 yen per kiloliter since 2002 and the price of trailer fuel of diesel oil increased by 48% to 93,000 yen. Nippon Steel expects the cost of vessel charter and fuel increases by around 10 billion yen for fiscal 2006 from fiscal 2002.