Japanese Carriers Optimistic Ahead of ONE Merger

 05 Jan 2018 10.51am

The CEO of Mitsui O.S.K. Lines (MOL) and the President of Kawasaki Kisen Kaisha (K Line) have released positive statements about what the future will hold for the two Japanese carrier lines in 2018 as they prepare to merge with Japan’s third largest container shipping company, Nippon Yusen Kaisha (NYK), to secure their profitability into the future.

Scheduled for April 2018, the companies will merge into Ocean Network Express (ONE) and will rank sixth in terms of global ranking by vessel capacity after the merger — a combined 1.48 million TEU on 234 ships; well above Evergreen’s 1.1 million TEU and just behind Hapag-Lloyd’s 1.56 million TEU.

With a combined orderbook of around 187,000 TEU in 2018, ONE has the potential to eclipse Hapag-Lloyd, which has no ships on order.

Read a paper by Professor Jean-Paul Rodrigue, Department of Global Studies & Geography, Hofstra University, on new global supply chain principles

A primary function for ONE will be to reduce costs by cutting out duplicated sailings.

According to reports, the companies say they expect to save ¥50bn (US$ 440 million) in costs in the first fiscal year ending 31 March 2019, and ¥110bn (US$ 941 million) a year thereafter.

Tadaaki Naito, President, NYK, said that the carrier line,  which has a  38% stake – compared with the 31% each held by K Line and MOL, would aim to commence services from April and that “the difficult work of bringing the company to life is continuing”.

Murakami, President and CEO of K Line, reflected on how the merger was coming at a time of global geopolitical instability, but strong economic growth, which he believes will continue to fuel a robust marine cargo trade.

He said: “I believe this new enterprise will deliver the advantages of expansion of scale brought by the integration.

“I expect it will also achieve greater competitiveness by bringing to bear the best practices of the three companies and demonstrate a strong presence in a containership industry that continues to undergo a paradigm shift.”

Ikeda, President and CEO, MOL Group, echoed the sentiments of Naito and Murakami by noting that conditions remained mixed across the shipping industry and that “a full-scale recovery is still in the making.”

The merger into ONE “will be a major turning point for MOL and mark a new beginning,” he said.

In a recent statement, the member carriers Hapag-Lloyd, Ocean Network Express and Yang Ming said: “After one year of cooperation we are proud to say that our services and the network improved significantly.

“The business is well on track in operational terms and with the delivery of several new big ships we are able to serve our customers even better.”

The comprehensive network of 33 services is connecting more than 81 major ports throughout Asia, North Europe, the Mediterranean, North America, Canada, Mexico, Central America, the Caribbean, Indian Sub-Continent and the Middle East with fast transit times and a wide range of direct port-to-port-connections.

ONE Timeline: 

 

Read more: Alphaliner has rendered a picture to give the shipping industry an idea of how the new Ocean Network Express (ONE) ships may look when Nippon Yusen Kabushiki Kaisha (NYK), Mitsui O.S.K. Lines (MOL) and Kawasaki Kisen Kaisha (K Line) launch the new service in April 2018

  Carriers, Global Economy/Trade, Going Places, Politics, Ports, Shipping