Three shipping firms partner to face sector crisis
2016-11-02 10:49:02   copyfrom:    hits:

Container transport vessel MOL Prestige RGB (Photo: CC BY-SA 3 0)JAPANWednesday, November 02, 2016,01:40 (GMT + 9)
 

Container transport vessel MOL Prestige RGB. (Photo: CC BY-SA 3.0)

 

Click on the flag for more information about JapanJAPAN 
Wednesday, November 02, 2016, 01:40 (GMT + 9)

 

Three shipping businesses from Japan -- Kawasaki Kisen Kaisha, Ltd.Mitsui O.S.K. Lines Ltd., and Nippon Yusen Kabushiki Kaisha -- have announced the creation of a new joint-venture company to integrate the container shipping businesses in order to better face difficulties affecting the sector.

The decision was adopted after having been treated by the board of directors of each company and it is now subject to the approval by the competent authorities.

The business integration and shareholders agreement includes worldwide terminal operating businesses of the three companies, excluding Japan.

With the joint venture, the three firms expect to be able to better overcome certain issues affecting the container shipping industry, which has struggled in recent years due to a decline in the container growth rate and the rapid influx of newly built vessels.

This situation has led to an imbalance of supply and demand which has destabilized the industry and has created an environment that is adverse to container line profitability.

In order to combat these factors, industry participants have sought to gain scale merit through mergers and acquisitions and consequently the structure of the industry is changing through consolidation.

Under these circumstances, the three companies have decided to integrate their respective container shipping on an equal footing to ensure future stable, efficient and competitive business operations.

The new joint-venture company is expected to create a synergy effect by utilizing the best practices of the three companies. And by taking advantage of scale merit of its vessel fleet totalling 1.4 million TEUs, realize integration effect of approximately JPY 110 billion (USD 1.04 billion) annually and seek swiftly financial performance stabilization.

By strengthening the global organization and enhancing the liner network, the new joint-venture company aims to provide higher quality and more competitive services in order to exceed their clients’ expectations. 
 

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