Freight News, Sea
Japanese shipping giants to merge[ November 1, 2016 // Chris ]
The three main Japanese-owned container lines – K Line, Mitsui OSK and NYK – are to merge, creating a million teu-plus grouping. A new joint-venture company will integrate the container shipping businesses including terminal operations outside Japan.
The new joint-venture company will be formally established on 1 July 2017 and actual operations are not planned to start until 1 April, 2018.
The three companies said that the merger had been prompted by weak market conditions. Container shipping has struggled in recent years with weak growth coupled with a rapid influx of new vessels. The imbalance of supply and demand has destabilised and slashed profits.
The operators put the combined fleet at 1.4m teu, with a 7% share of the global market. However, analysts Vesselsvalue (whose figures include only owned tonnage, not chartered ships) put it at 1.05m teu. According to VesselValue, the merged line would be the worlds sixth biggest line in owned teu terms, just behind the combined Hapag-Lloyd-UASC’s 1.075m teu.
In asset value terms, the merged Japanese operation would however be the world’s third biggest entity, at $6,130m, says Vesselsvalue, behind China Cosco’s $7,972m and fractionally ahead of CMA CGM/APL.
Rumours have been rife in the market about the stability of Japan’s shipping lines, following the collapse of Korea’s Hanjin. The merger will be seen as an attempt to reassure customers and investors.
In a previously announced move, the three Japanese lines were due to join with Hapag-Lloyd, Taiwan’s Yangming and, at the time, Hanjin, in a new operational grouping, THE Alliance, in April 2017.
Tags: K Line, Mitsui OSK, NYK