Kawasaki Kisen Kaisha, Ltd. ("K" Line) announced the merger of "K" Line's two subsidiaries, "K" Line Air Service, Ltd. and "K" Logistics Corp. effective July 1, 2006.

Recently, "K" Line decided and published its newly-revised interim management plan "K" LINE Vision 2008 + starting from fiscal 2006, in which "K" Line ranked the freight forwarding/harbor transportation business as one of its strategic business fields. All of the group companies will continue to deploy, as a basic principle, the community-based logistics business services as one body, and at the same time, promote the formation of a business structure capable to successfully meet various customers' needs.

By merging "K" Line Air Service Ltd., which currently has a worldwide service network will function as the core company in the group logistics business, with "K" Logistics Corp., the provider of marine logistics
services, "K" Line expects to further unify its logistics services in both marine and air cargo and to set up a single front office company.

Taking advantage of this opportunity, the Company will reinforce its management system to globally deploy comprehensive logistics business services including one-stop services by effectively tying up with "K" Line Group companies such as Century Distribution Systems, Inc. that is engaged in buyers' consolidation services mainly for the U.S. and Europe; Universal Warehouse Co. that is operating warehousing in Los Angeles and Tacoma; Universal Logistic System Inc. that is engaged in trucking business in the same cities; and other related group companies engaged in community-oriented operations such as forwarding, warehousing and trucking businesses in different countries in the world.

By the merger of "K" Line Air Service, Ltd. and "K" Logistics Corp., the new company will start off as a front office company providing globally integrated transportation services by seamlessly connecting transportation via air, sea and land by utilizing sophisticated IT systems consisting mainly of VMS (Visibility Management System), which is a logistics system supporting customers' supply chain management, developed by "K" Line, as well as combining various know-how in air carriage, marine carriage and land transportation cultivated by both companies.

With effective date of merger: July 1, 2006, the name of the new Company will be "K" Line Logistics, Ltd. with it's Main office at Chiyoda-ku, Tokyo.