CONTACT US

Send us a message

* Please fill in the form below.
NYK, K Line and MOL pass first marker buoy en route to the merger

NYK, K Line and MOL pass first marker buoy en route to the merger

 The Competition Commission of Singapore (CCS) has become the first jurisdiction to approve the container divisions merger of deepsea Japanese shipping lines MOL, NYK and K Line.

 

The CCS said the joint-venture would not contravene its anti-competition rules where a merged entity controls more than 40% of a market – in this case the intra-Asia and East Asia services that converge on Singapore.

 

It said the merged entity would break market thresholds; industry barriers to entry are not especially high in the region; barriers to expansion remain low with continuing shipboard overcapacity and that “container lines are able to include Singapore as a port of call without incurring substantial cost”; and that a significant number of freight forwarder and beneficial cargo owning customers “demonstrate bargaining power through their procurement processes”.

 

The three carriers are to merge their liner and container terminal activities outside Japan as a response to the merger and acquisition activity sweeping through the liner industry.

 

During the recent TPM conference in Long Beach, Jeremy Nixon, chief executive of NYK line, defended the elongated time frame of the merger, which had been announced at the end of October, but was not set to be completed until April 2018.

 

Such a timescale, the longest of the mergers currently underway, has led some to argue that it is adding to market instability. Hua Joo Tan, executive analyst at Alphliner, said it was “the longest merger process” he had ever seen.

 

“This means there is a lot of pre-merger manoeuvring – somebody has to take the lead but nobody has, which has led to some aggressive price moves, and this will cause some uncertainty in the run-up to the merger.

However, Mr Nxion claimed there were legal reasons preventing a quicker process.

 

“We are now in the regulatory phase and we have to get clearance in 96 countries, that is why there is an 18-month timeline.

 

“I have been through two major mergers and acquisitions in my career, and I know how important planning is. We want to go through this very carefully as we put the network together – THE Alliance will effectively produce our east-west network.

 

“In July we will announce the name of the new company – and it’s going to be a good name – and start setting up the staff and the systems. But the three companies will continue to serve their respective customers until April 2018.

 

“However, the new company will begin to take bookings in the new system from February 2018.

 

Mr Nixon said the new firm would have $3bn in assets – $1.5bn in vessels and $1,5bn in terminals – and argued that it would be big enough to compete in the new era of consolidated liner shipping.

 

“We still think there is room in the market for a new brand: big enough to be sustainable and small enough to care about customers. For example, there are lines’ terminals in North America which will become part of the service, so we will focus on the whole end-to-end service.”

 

Ron Widdows, chairman of the World Shipping Council and a 40-year veteran of the liner industry, applauded the deal as something “really remarkable”, but argued the lines would need to find a new value proposition for shippers.

 

“This creates an animal that will have better cost and efficiency, but it is still in the order of magnitude that makes it smaller rather than the largest. The Japanese are going to have to find a way to compete, because if it is just about cost the big beasts will crush them.

 

“But these [Japanese] carriers, along with Hapag-Lloyd, have always been at the upper edges of service levels, so in all the uncertainty there’s an opportunity for someone to stand out and say that it isn’t all about cost.”

 

 

Source: Loadstar

Subscribe to our mailing list

* indicates required

OTHER NEWS

  • Khalifa Port Set to Handle Capesize Ships under EGA Deal
  • CMA CGM Completes Acquisition of Brazilian Cabotage Carrier Mercosul Line
  • World’s Biggest Automated Box Terminal Starts Trial Operation
  • China's 'Smart' Ship Debuts in Shanghai
  • Panama Canal Increases Daily Number of Neopanamax Vessel Slots as Efficiency Improves
  • Breaking: EU Okays COSCO’s OOCL Takeover
  • MSC Hires MacGregor to Upgrade 31 of Its Ships
  • Dutch Consortium to Study Autonomous Shipping
  • Maersk Line Closes Hamburg Süd Acquisition
  • In Depth: Sailing Through North
  • German Court Rejects Appeal Against Elbe River Dredging
  • Loaded Container Shipments to Break 200 Mn TEU Mark
  • Rotterdam Wants to Become Zero-Emissions Port by 2050
  • Hapag-Lloyd Adds Low Carbon Refrigerant Containers from Maersk
  • Alphaliner: Global Container Volumes Grow by 7.7 percent in Third Quarter
  • Cyber Liability Hampers Unmanned Ship Implementation
  • Hapag-Lloyd Eyes Market Share Grab on Asia-South America Container Trades
  • Singapore Wants to Start Using Aerial Drones for Remote Ship Inspections
  • Singapore Suspends Trade Relations with North Korea
  • SeaIntel: ​Low Vessel Utilization Puts Pressure on Freight Rates
  • Maersk: Shipping Must Raise Its Game to Cut Pollution
  • Oversupply causing fall in container shipping rates
  • Yang Ming Swings Back to Profit
  • Pakistani Shipbreaking Plot Sealed Off
  • CMA CGM Becomes World’s First Company To Use LNG For 22,000 TEU Ships
  • Maersk Steers Shipping Forecasts Lower
  • Cosco Shipping Ports to Build Freight Station at Khalifa Port
  • WWEA and IWSA Will Jointly Promote Wind Technology in Shipping
  • British Containership Loses 42 Containers Overboard Off Japan
  • Oil Traders Set Sights on High Seas as Diesel Renaissance Is Born
  • One carrier in particular has absorbed Hanjin's vessels
  • MSC orders 11 new 22,000-TEU vessels
  • Maersk Line: Digitalization Is a Must If You Want to Survive
  • McKinsey Says Container Shipping Should Digitize
  • UNCTAD: Consolidation in Container Shipping May Lead to Oligopoly
  • Qatari Vessels Have Banned from Suez Canal Ports
  • APL Launches New Korea China Straits Service
  • Hamburg Port Becomes Main ULCV Stop With New Cranes
  • World’s First Floating Wind Farm Opens Up Off Scotland
  • Rotterdam’s Box Volumes Continue Growing
  • Panama Canal Ends FY17 with Record Annual Cargo Tonnage
  • 2020 Sulphur Cap: Maersk Is Not on the Scrubber Team
  • Gloomy outlook for liner shipping as container rates continue to slide
  • Russia Setting Up Direct Shipping Line to Syria
  • Storm Wreaks Havoc in Port of Durban - Container Ship Blocked Port
  • CMA CGM: Indian Sub-continent Service Enhancement
  • Container rates still on the slide as Asia-Europe peak season 'fizzles out'
  • CMA CGM to increase its South Pacific footprint with acquisition of Sofrana Unilines
  • Are Chinese Banks New Source of Capital for Shipping?
  • Panama Canal Authority to Allow Booking Slot Swaps Among Alliance Members
  • Euroseas, Poseidon Eye Merger of Container Fleets
  • Norway Sets Up Second Test Area for Unmanned Ships
  • Hapag-Lloyd fleet 'now complete' as latest UASC newbuild ULCV is delivered
  • The SCFI recorded a fall of 4.6 percent for Asia- North Europe spot rates.
  • SeaIntel: Cascading of Larger Ships Hurting Asia-ECSA Rates
  • MSC Turns to DSME for 22,000 TEU Megaships
  • Latest ULCV orders the start of a slippery slope to new overcapacity glut?
  • SeaIntel: Q2 Results Paint a Better Picture for Container Carriers
  • Shipping in Changing Climates
  • Second hand Containership Sales at Record Level
  • More rate slippage on east-west trades as carriers prepare for slack season
  • Maersk credit rating downgrade threats are a red herring, argues financial analyst
  • SASAC Gives Green Light to COSCO-OOCL Deal
  • Carriers prepare for the slack season by blanking Asia-Europe sailings
  • Cntracking was at the 86th Izmir International Fair
  • Milaha has announced the launch of the first direct reefer service between Qatar and Turkey.
  • OOCL celebrates arrival of sister to the world's biggest containership
  • Drewry: Asia-Southern Africa Rates at 7-Year High
  • We hereby sincerely invite you to visit our booth at 86th Izmir International Fair
  • Merdan Erdoğan appointed CEO of www.cntracking.com
  • Hong Kong secures its shipping hub status with nod to vessel-sharing agreements
  • EU trade agreement creates healthy tailwind for Japan's ONE group
  • CMA CGM ULCV order could send ripples across tradelanes as rates strengthen
  • Top Carriers More Reliable in Q2
  • CMA CGM will launch new service linking Black Sea to Morocco and Algeria
  • MOL Delivers Stronger Quarter, Raises Outlook
  • Container spot rates on the rise, from Asia to the US, and Asia to Europe
  • Cosco acquisition of OOCL still faces “a degree of uncertainty”
  • ULCVs to Almost Double Capacity Share on Asia-North Europe by 2018
  • Soft Asia-Europe spot rates will harden as peak season approaches
  • Maersk still feeling effects of cyber attack
  • The negotiations for trade arrangements between the US and China have been concluded
  • CMA CGM, SEATRADE Enter Vessel Sharing Deal
  • More bigger ships set to put more pressure on Asia-Mediterranean container trade
  • Diana Containerships Ties Boxship Duo with Maersk, CMA CGM
  • WSC: Number of Containers Lost at Sea Drops
  • Cosco buys OOCL for USD 6.3 billion
  • Japan’s Trio Sets Up Container Shipping JV
  • Yildirim to Sell CMA CGM Stake as Plans to Buy Ports America
  • Hapag-Lloyd Ups Volume of Euro Bond Offering
  • Japanese carrier trio miss first target for ONE merger, but it's all 'going to plan'
  • CMA CGM sells 90 pct stake in L.A. container terminal for $817 mln
  • Maersk Claims Victory Over Cyber Attack
  • Cyber attack victims Maersk and TNT find ways to keep customers' cargo moving
  • Maersk Cyber Attack: Will Ocean Freight Rates Increase ?
  • Maersk suffers a cyber attack causing IT systems to fail
  • Wan Hai Boosts China-Vietnam-Thailand Links
  • South Africa rejects Japanese container line merger proposal
  • ZIM must plot a course through some choppy financial waters
  • Fitch: Boxship Rates Rise, Capacity Still Key
  • Transpacific rates still under pressure but Asia-Europe space still tight
  • MSC prepares contingency plan for cargo aboard Rickmers charters
  • Imabari Launches 20,150 TEU MOL Boxship
  • Maersk Line Not Accepting Cargo to/from Qatari Ports
  • Hapag-Lloyd becomes latest carrier to bring in container booking cancellation fee
  • Middle East air freight disruption looms as Qatar is blacklisted over 'terror links'
  • Japanese liner shipping trio becomes ONE, ready for launch next spring
  • FMC Discusses Regulatory Reform Initiative and Ocean Carrier Alliances
  • China-Europe rail boom as forwarders latch on to cost advantage for customers
  • Hapag-Lloyd finally completes merger with UASC
  • APL turnaround brings significant boost to CMA CGM first-quarter results
  • Uber Freight officially parks in the marketplace, but only taking full loads
  • China Sparks World Container Traffic Boom
  • Navios Containers Eyes USD 75 Mn for Rickmers Fleet
  • Shippers squeezing margins 'pushed carriers toward bigger ships and alliances'
  • Crane Falls at Jebel Ali Port after Boxship Collision, No Fatalities
  • Nerves jangle as shippers and forwarders wait to hear who is bankrolling Yang Ming
  • Future Management of Hamburg Süd Unveiled
  • Shock for Japanese shipping lines as merger plan is rejected by US FMC
  • Yang Ming Expects 2nd Stage of Recapitalization by June
  • targets 3% growth as next-generation Triple-Es start to arrive
  • Sharp Decline in Idling Boxships
  • APL Enhances China-Indonesia Coverage
  • Yang Ming Halts Share Trading
  • Shanghai port, world's busiest, grapples with traffic congestion
  • Drewry: Bigger Ships to Continue Pressuring Freight Rates
  • Alibaba extends partnership with KN to cover cross-border B2B shipments
  • Seago Line Sees Modest Profit amid Lower Freight Rates
  • ZIM, MSC Upgrade North Europe Express Service
  • DHL Says Ocean Freight Rates Have Reached Turning Point
  • CMA CGM Strengthening EURAF 5 Services
  • OCEAN Alliance Starts Ploughing the Seas
  • Yang Ming losses continue to mount after 2016 revenue slump
  • FMC green light for 2M Alliance co-operation with HMM on transpacific
  • NYK, K Line and MOL pass first marker buoy en route to the merger