Japan’s three major container shipping companies, Kawasaki Kisen Kaisha (K Line), Mitsui O.S.K. Lines (MOL) and Nippon Yusen Kabushiki Kaisha (NYK), have received conditional approval from local competition authorities to launch their newly formed joint venture (JV) known as Ocean Network Express.
The three companies will be required to take necessary measures to comply with the country’s competition law and various conditions set by the authorities before launching the JV.
The parties’ decision to combine their businesses follows a period of low oil prices and sluggish cargo demand within the industry, as well as over-supply of trade capacity, which has led to container freight rates reaching historic lows.
Approvals for the JV were previously secured from all relevant regions and countries, except South Africa, as of the end of June last year.
Ocean Network Express is anticipated to combine the container shipping business of K Line, MOL and NYK.
It will also include the three companies’ global terminal operation businesses outside Japan.
Ocean Network Express will operate a fleet of approximately 240 vessels, including a total of 31 ultra-large container ships featuring the world’s largest 20,000 twenty-foot equivalent unit (TEU) class vessel.
The JV is scheduled to begin service by April and intends to provide an improved level of service, as well as meet customer requirements more efficiently by developing an extensive network spanning 90 countries.
Plans for the formation of Ocean Network Express were originally announced in July last year.