#1We Find the Way NIPPON EXPRESS IR Presentation Materials Session 2 Strategy to Enhance Domestic Businesses in Japan Susumu Akita, Executive Vice President, COO, and Representative Director August 26, 2020 Nippon Express Co., Ltd. NIPPON EXPRESS MITEN ORELL EXPRESS YOUR BUSINESS NIPPON EXPRESS YOUR GLOBAL BUSINESS NEEDS GLOBAL LOGISTICS#2Measures for the Strategy to Enhance Domestic Businesses in Japan We Find the Way NIPPON EXPRESS NIPPON EXPRESS 引越日 0120-1540 Copyright 2020 NIPPON EXPRESS, All rights reserved. Initiatives (1) Further Personnel Reassignments (2) Automate and Streamline Administrative Tasks (3) Introduce Labor-Saving Measures And Automation (4) Strengthen Integration of Land, Sea, and Air (5) Strengthen Sub-Agent Operations (6) Expand Sales of New Products (7) Structural Reform of The Moving & Relocation Business (8) Improve Efficiencies in Small-Lot Shipments (9) Fee Revisions for the With-COVID-19 Era (10) Maximize Cost Reductions and Company Strengths 1#3We Find the Way NIPPON EXPRESS (1) Further Personnel Reassignments (Reduce Back Office Personnel) Reorganize offices and streamline administrative work to reduce back office employees; reassign employees to sales departments ➤FY19 Reduced 116 positions ➤ Continue to consolidate operations support offices by block, specific branches ➤ FY20 Plan to reduce approximately 100 positions in branch back office functions ➤ Also plan to reduce 100 positions at HQ Move further in adopting RPA, other administrative streamlining Ocean Specific Branches Operations Support Block Specific Branches Operations Support Operations Support Specific Branches Land Copyright ©2020 NIPPON EXPRESS, All rights reserved. Operations Support Air Specific Branches FY19 to FY20 Sales Divisions, Priority Industries Reinforce Overseas, Workplace Capabilities (Approx. 300 people) 2#4(2) Automate and Streamline Administrative Tasks We Find the Way ■Pursue RPA through 2WAY at company level and worksite level NIPPON EXPRESS Streamline company-level administrative tasks via RPA ■Develop and implement robots through HQ consolidation and leadership (Information Technology Promotion Division) • Operations analysis and standardization coordinated with on-site personnel • 608 robots in operation (as of the end of July 2020) Streamline work site administrative tasks via simplified RPA ■Develop and implement simplified robots in conjunction with improved on-site administrative tasks • • Begin automation tailored to needs of each work site • Simplified initial designs and specification changes after release Assign responsible personnel to domestic blocks (50 people) and advanced model branches (10 branches) Copyright ©2020 NIPPON EXPRESS, All rights reserved. 3#5(3) Introduce Labor-Saving Measures and Automation We Find the Way Pursue labor savings and automation through advanced technology; improve capabilities related to profitability, quality, and DX 1. Improve productivity for increased profits (increase sales through expanded processing capacity, reduce operating costs) 2. Improve quality of operations (Utilize IoT, robotics, Al, etc., to reform operations) 3. Strengthen response to With-COVID-19 era and labor shortages (ensure social distancing, pursue labor savings) NEXPRESS AGF 國日本通運 BRA IPPON EXPRESS NIPPON EXPRESS Assign total of 60 people to be responsible for operational advancements and efficiencies across 34 branches in Japan ✓ Assign total of 20 people to be responsible for operational labor savings and automation across 16 branches in Japan Establish a labor-savings and automation model by industry and business type; expand models gradually company-wide. 003 Copyright 2020 NIPPON EXPRESS, All rights reserved. 4#6(4) Strengthen Integration of Land, Sea, and Air We Find the Way NIPPON EXPRESS NIPPON EXPRESS ■Sales team reorganization Restructure integrated land/ocean/air sales teams by customer, industry, and business Use locations, facilities effectively Integration Consolidate sales division offices, share/consolidate operating locations and facilities; reassign to other locations within areas Pursue cooperative operational structure Share vehicles effectively for higher loading and operating. capacity; share information related, to empty warehouse space; etc. NIPPON EXPRESS Copyright ©2020 NIPPON EXPRESS, All rights reserved. 5 LO#7We Find the Way NIPPON EXPRESS (5) Strengthen Sub-Agent Operations Maximize group work force through work-style reform and labor laws Maximize Group Synergies Maximize company (group) strengths (personnel, vehicles) to reduce outsourcing costs and implement cost controls toward greater sub- agent operations Strengthen management in terms of labor hours, same pay for same work (work-style reform), and compliance Copyright © 2020 NIPPON EXPRESS, All rights reserved. 6#8(6) Expand Sales of New Products (NEX-NET Product BOX) Allow for small-lot shipments Clear fee structure Prevent damage Significant reduction in packaging materials We Find the Way NIPPON EXPRESS Multi-mode unit product 保荷量注意 自日本通道 Support for all modes Shorter loading/unloading times Unit Product Launched July 15 Nationwide Protect Box Transportation Service Zone Fare per Box • Large trucks →32 unit capacity Lockable Prevent contact with other cargo Offer unique services to respond to a variety of customer demands Transportation Mode Ship/Recover Select mode according to customer need Speed Protect BOX AIR NIPPON EXPRESS Basic Service (Truck Transportation) Protect BOX Arrow Low-Cost • 12-foot container → 12 unit capacity • Air container - 1 unit capacity Copyright ©2020 NIPPON EXPRESS, All rights reserved. Protect BOX RAIL and SEA PPON BOX breaks down for recovery 7#9(7) Structural Reform of the Moving & Relocation Business ■Develop system that leverages our advantages Hire more Moving & Relocation workers (skilled workers) Hire more planners Increase to 441 in Japan ☐ Expand workforce Increase to 786 in Japan ☐ We Find the Way NIPPON EXPRESS Conduct pre-inspections, capture weekend (Fri/Sat/Sun) demand (increase number of jobs) Implement more detailed combinations of operations (increase profitability) Adopt Remomi remote estimate system July 1~ Perform pre-inspections tailored to customer availability New style of moving in the With-COVID-19 era Adopt digital technologies for improved productivity Copyright 2020 NIPPON EXPRESS, All rights reserved. 80#10Optimize Operations (8) Improve Efficiencies in Route Motor Transportation Business Revise Product Specifications O Revise long/unusual cargo sizes (October 2019) O Introduce Sat/Sun delivery (April 2020) O Revise holiday delivery (planned for September 2020) Improve Margins on Mixed Loads Optimize Trunk Line System O Improve trunk line load capacity management O Share/reduce low-capacity routes O Expand terminal relay functions Revise Collection and Delivery Systems O Allocate collection and delivery vehicles according to volume fluctuations O Expand cooperative area with Meitetsu Transportation Improve collection/delivery efficiency Introduce Operating Efficiencies Copyright ©2020 NIPPON EXPRESS, All rights reserved. Expand Sales We Find the Way NIPPON EXPRESS Expand sales ○ Strengthen sales in major areas (Tokyo, Nagoya, Osaka) O Expand sales through ocean and air business unit O Bring route motor cargo performed by other companies inside the group Develop New Products Capture demand in new needs Respond to cost increases O Nationwide rollout of new value-added Protect BOX Arrow product in Japan (July 2020) Charge Reasonable Fees O Continue negotiations with low-fee customers O Negotiate with customers to eliminate wait time and incidental work; negotiate fee collections Secure Revenues Improve Efficiencies in Route Motor Transportation Business 9#11We Find the Way NIPPON EXPRESS (9) Fee Revisions for the With-COVID-19 era Continue to persevere in our efforts despite the challenges of the COVID-19 pandemic ➤ Propose new products and services. Increase prices in real terms through cost reductions by changing cargo handling. operations, changing routes, improving wait times, etc. (10) Maximize Cost Reductions and Company Strengths Leverage company (group) land/ocean/air strengths (personnel, vehicles) to the fullest, reducing outsourcing costs, and strengthening daily cost controls ➤ We are revising business process plans (cost reductions) for a With-COVID-19 world and expending our best efforts NIPPON EXPRESS NIPPON EXPRESS Copyright © 2020 NIPPON EXPRESS, All rights reserved. NIPPON EXPRESS ECOLINER 31 藤日本通塩 10#12We Find the Way 誦 日本通運 NIPPON EXPRESS No information contained in this document is intended to solicit purchase or sale of the Company's shares. Views, forecasts, and other forward-looking statements contained in this document are based on the Company's assumptions, judgments and beliefs in light of the information currently available to it. 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