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3 Major Japanese Container Shipping Lines to Consolidate by July 2017

3 Major Japanese Container Shipping Lines to Consolidate by July 2017.Transportfolio

container_ship_consolidation_transportfolio

As we predicted earlier this year, consolidation will and has continued this year. Kawasaki Kisen Kaisha, Ltd. (“K” Line), Mitsui O.S.K. Lines Ltd. (MOL), and Nippon Yusen Kabushiki Kaisha (NYK), three of Japan’s largest container ship lines, have agreed to establish a new joint venture company by approximately July 2017. And by April 2018, business is expected to commence pending regulatory approvals.

According to The Wall Street Journal, “the three shipping companies announced they have agreed to form a joint venture that they estimated would save them a combined total of around ¥110 billion ($1.05 billion USD) annually through synergies.”

The big question you are probably asking is what impact this and other consolidations will have on your business. At this point, we believe the impact will not be too drastic. However, we do believe this consolidation emphasizes the importance of diversifying your carrier selection in the future.

Since all three Japanese carriers are on the same alliance for 2017 (the alliance along with Hapag-Lloyd and Yang Ming), the impact in 2017 will likely be minimal. The consolidation will increase the Japanese carriers’ global capacity—ranking number six in the world and only preceded by Maersk, Mediterranean Shipping Company, CMA+APL, COSCO+China Shipping Container Lines, and Hapag-Lloyd+United Arab Shipping Company.

Consolidation will continue to be a hot industry topic and trend as carriers continue to consider consolidation to gain better control over efficiencies and profitability. We expect more information on this particular consolidation to come in the near future; as it becomes available, we will provide updates on our social media channels.

If you have any questions on how this may impact your business, please reach out to your C.H. Robinson representative or connect with an expert.

Comments

Ajit Sukumar

The news is good from consolidation point of view and also renewed services which will help trade and their competitivenes for the lines and also for Japan

11.5.16

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