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 established a holding and operating company for the integration of their container shipping businesses, including worldwide terminal operation businesses outside Japan.
The new Tokyo-based holding company will be known as Ocean Network Express Holdings and the Singapore-based operating company has been named Ocean Network Express.
The parties noted that they expect to complete the approval process for compliance with competition law before the service commencement date of 1 April next year.
NYK noted that the growth in demand for cargo shipping has slowed over the last several years, while the supply of tonnage has steadily increased due to a large number of newly delivered vessels.
This has deteriorated the balance of supply and demand within the industry.
The three Japanese companies have decided to combine their businesses due to low oil prices, sluggish cargo demand, and over-supply of trade capacity, which has led to container freight rates reaching historic lows.
The firms have made efforts to cut costs and restructure their business, but found that there are limits to what can be accomplished individually.
Ocean Network Express will operate approximately 240 vessels, including 31 ultra-large container ships such as the world’s largest 20,000TEU class.
The combined entity will aim to provide the world's highest level of service and exceed customer needs by developing an extensive network spanning 90 countries.
Image: NYK Line headquarters in the Yusen Building, Japan. Photo: courtesy of Rs1421.