Japan’s Largest Shipping Firms to Merge Container Operations
The next phase of container shipping consolidation will go through Japan. The country’s three largest shipping companies plan to merge their container shipping operations, the WSJ’s Alexander Martin reports, a dramatic action aimed at coping with the steep decline in global container business. Nippon Yusen K.K., Mitsui O.S.K. Lines Ltd. and Kawasaki Kisen Kaisha Ltd., said they agreed to form a joint venture to include all their ships and cargo terminals starting next year and that it will start operating in April 2018. They’ll gain annual operating cost savings of some $1.05 billion. They also hope to avoid the turmoil created when South Korea’s Hanjin Shipping Co. went into bankruptcy at the end of the summer, sending the country’s exporters reeling from the sudden loss of shipping capacity. NYK Line, MOL and K Line already are members of the broader carrier operating group called THE Alliance, so the new announcement will keep that carrier tie-up in place as container shipping companies rebuild the structure of the global industry in a bid to stave off deeper financial losses.
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