[May 22, 2006]

Yusen Air & Sea Service Co., Ltd. (YAS), resolved at an extraordinary meeting of its board of directors held on May 10, 2006, that it would form a business alliance with Yamato Logistics Co., Ltd. (YLC), a subsidiary of Yamato Holdings Co., Ltd.

Purpose of the business alliance

YAS focuses on the air cargo forwarding business, where a large number of small cargoes are collected and consolidated into bulk cargo and transported via airlines, in addition to the ocean cargo transportation, land cargo transportation and distribution, customs clearance, warehousing, packing, and other distribution businesses throughout the world.

On the other hand, YLC mostly provides business-to-business distribution services with a focus on small parcel delivery (including express courier and mail services) and forwarding, as well as the design, improvement, and restructuring of cargo distribution systems and consulting services, thus supporting creative innovation of logistics for enterprise customers.

YAS concluded that it would obtain synergy effects by utilizing both companies' strengths and managerial resources and consequently agreed to the business alliance with YLC.

Scope of the alliance

1. Co-loading of air cargoes. This will begin immediately wherever possible.
2. Establishment of a joint business company for integrated operations of international through transport with the foundation and operations expected to commence by the end of 2006.
3. Standing up a collaborative and permanent Alliance Promotion Committee to discuss the specifics of the alliance and effective utilization of managerial resources of the two companies for further enhancement of the alliance

Outline of the partner

1. Company name: Yamato Logistics Co., Ltd.
2. Description of business:
   Establishment of logistic systems in compliance with SCM Physical distribution consulting and proposals for improvement Operation and management of distribution centers Design, operation, and management of computer systems Domestic and international through cargo transportation (forwarding, customs clearance, and warehousing) House moving and transportation of fine art International small parcel delivery service
3. Established on: November 17, 1999
4. Headquartered at: Asahi Bldg. No.3, 1-2-15, Horidome-cho, Nihonbashi Chuo-ku, Tokyo 103-0012 Japan
5. President & Representative Director: Etsuo Ogawa
6. Capital: 1.88 billion yen
7. Number of employees: 2,407 (as of March 31, 2006)
8. Chief stockholder and its ratio (as of March 31, 2006): Yamato Holdings Co., Ltd.Ratio of stock holdings: 100%
9. Relationship between YAS and YLC: No financial or personal relationships exist as of May 10, 2006

Date of commencement of the alliance

As stated in "2. Details of the alliance" per each activity.

Schedule

May 10, 2006: Extraordinary meeting of the board of directors
May 10, 2006: Conclusion of the basic agreement for the business alliance
December 2006 (scheduled): Establishment of a joint business company

Perspective

Improvement in performance is expected due to the increase in cargo volume transported and the more advantageous freight obtained, resulting from the conclusion of this alliance; however, the specific value has not yet been identified. Estimate for the business in the coming fiscal quarters has not been made but will be disclosed as required.

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