Until recently, the industrial structures of Japan and South Korea resembled each other very closely, though equity relations between Japanese enterprises and their counterpart in South Korea were rare. As a result, with the exception of certain high-technology products, manufacturing equipment and components, business enteiprises in the two countries saw each other as competitors in the international market. Particularly in the major industries such as shipbuilding, textile, iron & steel automobiles and semironductors, Japanese and Korean manufacturers have competed fiercely in the international market. However, Korea's deep economic crisis, which was triggered by the Asian financial crisis, and the drastic structural reforms undertaken by Korean industries to overrome the crisis, have brought about substantial changes in business relations between the two countries. Of course, we should not overlook changes in the business environment in the two economies, including the Korean government's decision to open the market to Japanese imports, increasing acquisitions of Japanese and Korean firms by U.S. and French corporations, and other developments in trade and capital transactions in the international arena. This series of changes has played a catalytic role in transforming the traditional business relations between the two countries, at both the industry and enteiprise level from either lopsided rompetitive relations, or vertical divisions of labor (in which machinery and components were exported to Korea from Japan, with Korea then producing products for the U.S. and European markets using the imported machinery and components as industrial inputs). Recently there have been some noteworthy developments in Japan-Korea business relations. First, nearly all the personal computers being marketed by SOTEC, a Japanese computer venture business, are produood at a Trigem Computer factory in Korea, and imported daily from Pusan, Korea, to Shimonoseki, Japan, on board the Kanpu ferry service, and then delivered to distributors throughout Japan. Second, SONY Electronics (Korea) Ltd. has design and engineering departments comparable to those in SONY:factories in Japan, and these factories in both Korea and Japan have formed an efficient international supply chain, also making use of the Kanpu ferry service. Also, Taiiheiyo Cement Colp. has acqiuired Sangyong Cement Industrial (Korea). Nippon Steel CoipOration has ao:iuired part of the stocks of Korean iron and steel mills. Finally, Renault has acquired Samsung Motors in Pusan (and through this, Nissan and Samsung have been integrated into the Renault group, an international automobile giant). As a result of these deve1opments, the structuring of a new logistic environment that utilizes existing international physical distribution networks between Japan and Korea, as a "quasi-inland transportation system is being sought for. In Shimonoseki Port, the Kanpu ferry servce currently has to wait at anchor for more than eight hours before docking, due to CIQ (customs, immigration, quarantine) problems, and this long waiting time becomes a serious obstac!-e to instituting efficient supply chain management.