Nippon Yusen, Mitsui O.S.K Lines and Kawasaki Kisen Kaisha (K-Line), three of the largest shipping companies operating in Japan, are merging operations to tackle financial struggles of the industry.
The three companies have agreed, after the resolution by the board of directors of each company held today, and subject to regulatory approval from the authorities, to establish a new joint-venture company to integrate the container shipping businesses (including worldwide terminal operating businesses excluding Japan) of all three companies and to sign a business integration contract and a shareholders agreement.
The merged resources will account for 7% of the global shipping market, totaling at 256 container ships; the merger is going to save an estimated US$1 billion a year and will create the third highest ranked container company in the world.
The shipping industry has been struggling for years with massive oversupply, and since the collapse of Hanjin Shipping on August 31, 2016 shipping companies have been taking steps to avoid going under with the current market.
Tadaaki Naito, President of Nippon Yusen, said: “If we don’t want the number of Japanese shipping companies to be zero, we need to create one strong, splendid company.”
In September, 2016, K-Line fell victim to rumours that they were going bankrupt, and it was later discovered in a press release by APL admitting fault, that they had been started by their employees speaking to clients.