Possible merger of Japanese shipping lines raises many questions

Alphaliner, the Paris-based container shipping analysts, has just published an interesting graph outlining the consequences of a merger of NYK, Mitsui OSK Lines (MOL) and K Line’s container businesses.

At present MOL is the largest of the three shipping lines, with an actual and ‚on-order‘ fleet of just over 500,000 TEU, representing 2.8% of the world’s total. NYK is just behind with a fleet representing 2.6%. K Line’s fleet is 2.2% of world capacity. MOL is the tenth largest container carrier, NYK the eleventh whilst K Line is the sixteenth. In terms of capacity, they are all dwarfed by Maersk which has 15% of actual/potential capacity.

Alphaliner points out that combined the three companies would be the fourth largest carrier, with 7.5% of the world’s total fleet; just behind CMA-CGM which has 8.5% capacity-share. In a sector that appears to be increasingly driven by economies of scale this is a powerful logic.

Although Japan has hardly the most transparent business culture, there have been strong rumours that the three are discussing their options. Koichi Muto, President of MOL appeared to indicate this in a speech addressing the state of the industry last week. Quoted in Lloyds List he said a merger of the three Japanese lines could "be an option" whilst immediately denying that any talks had taken-place. However, given the context of a speech on the un-sustainability of present trends in the container shipping market, the implication was clear.

Such a merger would raise many interesting questions, not least of which would be the future of NYK Line’s substantial logistics services business. Another would be the future of the Japanese three’s ‚exotic‘ trades such as car-carriers where such a combination would have a very strong market position. There would also be issues around the financial strength of any new company, bearing in-mind some of the component companies have significant debt.

However, possibly as an unintended warning, Alphaliner point-out in its analysis that there have been no takeovers or mergers of such a magnitude in the container shipping market since 2005; when Maersk bought P&O Nedlloyd. This is an interesting if dangerous comparison to make. For that purchase too appeared to be justified on the grounds of combined market-share, yet it can hardly be described as a success.

Quelle: eyefortransport
Portal: www.logistik-express.com