In addition to acting as intermediaries, sōgō shōsha also engage in logistics, plant development and other services, as well as international resource exploration.
First, they have extensive risk management capabilities in that they trade in many markets, keep balances in many foreign currencies and can generate captive supply and demand for their own operations.
As Japan modernized, a number of existing family-run conglomerates known as zaibatsu (most notably Mitsubishi and Mitsui) developed captive trading companies to coordinate production, transportation and financing between the various enterprises within the group.
[11] Until the 1980s, sōgō shōsha operations were largely concentrated on supporting Japanese manufacturers' international transactions, particularly in the textile and chemical industries.
[10] The collapse of the Japanese asset price bubble in the early 1990s led to a wave of mergers and reorganizations among sōgō shōsha, reducing their total number to seven.
At the time the law was debated, Mitsui & Co. was the sixth-largest exporter from the United States, and sogo shosha accounted for about half of Japan's inbound and outbound trade.