K Line, MOL, NYK to join forces in container shipping.

japanese shipping container - SAL Global logistics

Japan’s big three container shipping companies have agreed to establish a new joint-venture company to integrate their container shipping businesses.

Following the resolution by the board of directors of each company on Monday 31st October 2016, and subject to regulatory approval, K-Line (Kawasaki Kisen Kaisha), MOL (Mitsui O.S.K. Lines), and NYK (Nippon Yusen Kabushiki Kaisha) are to establish a new company which will include the container shipping businesses, and worldwide terminal operating businesses, excluding Japan.

Please see Notice of Agreement announcement per: http://www.mol.co.jp/en/pr/2016/img/20161031.pdf

The new joint-venture company is expected to start as of April 1, 2018, and would operate a fleet totalling approx. 1.4 million TEU’s. This places the new company in sixth position in the market, with an approximate 7% of global share. MOL, NYK & K-Line are currently ranked at No.11, No.12 & No.15 respectively.

K-Line and MOL, which will each hold 31 percent, with NYK Line, holding the remaining 38 percent, are planning to establish the new joint-venture company on 1st July 2017.

“All parties had opted for the move to ensure future stable, efficient and competitive business operations in the container shipping industry, which has struggled in recent years due to a decline in the container growth rate, along with the rapid influx of newly built vessels.
Slowing trade growth and excess capacity have created “an adverse supply imbalance environment which has significantly undermined long-term industry financial stability and future sustainability” NYK said in a notice to customer on Monday.”

“It wasn’t just the need to become larger and more efficient that drove the announcement on Monday, it was the recognition, especially after a string of mergers, acquisitions and failures just in 2016, that the industry is headed irrevocably in the direction of unsustainable financial performances, and the Japanese Lines could no longer fail to respond.”

We will continue to update on the progress of this merger over the process of the transition.
In the meantime, should you have any questions or concerns in relation to this, please contact us – TEL: 1300 814 743, or sales@salglobal.com.au