FMC throws a spanner in Japanese box merger plans

FMC throws a spanner in Japanese box merger plans

The Federal Maritime Commission (FMC) yesterday threw a curveball on the planned mega Japanese container shipping merger.

The FMC has said Kawasaki Kisen Kaisha (K Line), Nippon Yusen Kaisha (NYK) and Mitsui OSK Lines (MOL) cannot share information with each other in advance of a new merged business entity being created next year.

Amid unprecedented consolidation in the container sector last year Japan’s three largest shipping lines agreed to merge their boxlines together, a move that will give the combined entity a fleet of around 1.5m teu.

NYK will have a 38% stake in the proposed new venture with K Line and MOL holding 31% each.

“Most container shipping companies are making a loss. The three Japanese companies have made efforts to cut cost and restructure their business, but there are limits to what can be accomplished individually. Also, in order to keep a membership of a global alliance continuously, it would be necessary to have above a certain business scale level,” the three lines said in a statement last October.

Sam Chambers

Starting out with the Informa Group in 2000 in Hong Kong, Sam Chambers became editor of Maritime Asia magazine as well as East Asia Editor for the world’s oldest newspaper, Lloyd’s List. In 2005 he pursued a freelance career and wrote for a variety of titles including taking on the role of Asia Editor at Seatrade magazine and China correspondent for Supply Chain Asia. His work has also appeared in The Economist, The New York Times, The Sunday Times and The International Herald Tribune.

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1 Comment

  1. Professor Hercules E. Haralambides
    May 7, 2017 at 5:39 pm

    No spanner Sam.
    Although they must file with FMC, this is a merger and thus it falls in the ambit of the Department of Justice. No one is preventing the 3 companies to merge. Once this has happened, DoJ will take over. But FMC will never preempt the work of DoJ, particularly as the Shipping Act of 84 does not give FMC the mandate to approve/disapprove such schemes, opposite to what happens in Europe.
    Brgds,
    HH