On October 31, 2016, three Japanese steamship lines elected to merge their container businesses, which would create Asia’s second-largest box carrier and the world’s sixth-largest one overall. The merger, between Nippon Yusen KK (NYK), Mitsui O.S.K. Lines Ltd. (MOL) and Kawasaki Kisen Kaisha Ltd. (K-Line), would establish a completely new joint-venture company to integrate and consolidate the container shipping businesses of all three companies. The combination still needs to be approved by regulators in the European Union, US, China and Japan among others.
Jeremy Nixon, NYK’s Global Liner Management Division CEO, states in a letter “[that] the container shipping industry has faced over the last five years unprecedented financial challenges. Global trade growth has slowed and the industry has witnessed a significant over supply of new tonnage. These two factors have contributed to create an adverse supply and demand imbalance environment, which has significantly undermined long term industry financial stability and future investment sustainability. In order to combat these factors, industry participants have sought to gain scale merit consolidation through integration and acquisition activity. Under such similar circumstances, NYK, MOL, and K-Line have now decided to integrate all their container shipping and terminal operating businesses excluding Japan, into one new single entity.”
Looking forward pending regulatory approval, the new joint-venture company will be established on July 1, 2017, with business commencement expected on April 1, 2018. In the meantime, all three steamship lines will continue with standard operations.
Deringer will continue to monitor the merger and provide updates should there be any key developments. Please send an email to Deringer’s Marketing Department with any questions.