Japan’s container shipping heavyweights — Nippon Yusen, Mitsui OSK Lines and Kawasaki Kisen Kaisha — have announced plans to merge into the world’s sixth-largest box line.
Reacting to the sector’s ongoing battle against over-capacity and the global economic downturn, the trio’s merger was driven by the aim of “becoming one … so none of us become zero”, says Nippon Yusen president Tadaaki Naito.
According to reports, the combined entity will have a fleet of 256 vessels representing a total capacity of 1.38 million TEU (about 7% of global capacity) and its combined revenue will be $US19 billion.
With all three carriers having reported losses in their interim financial results, the combined benefits of the merger have been estimated at about US$1.1 billion annually.
Due to be formed on July 1 next year and commence operations in April 2018 — pending regulatory approval — the merged entity will be owned 38% by Nippon Yusen and 31% each by the other two partners.
The development continues a wave of consolidation and or collapse in the global container shipping industry, as the sector strives to cut costs and share risk in what has been described as its “worst-ever downturn”.