Japanese Carriers Forge Ahead with Alliance

Kawasaki Kisen Kaisha (K-Line), Mitsui O.S.K. (MOL) and Nippon Yusen Kabushiki Kaisha (NYK) have formally established a joint holding company for their container business alliance.

The new company, named Ocean Network Express, includes terminal operation businesses outside Japan. The three companies have received all the necessary approvals with local competition laws, except for South Africa. In South Africa, the new company expects to complete the approval process for compliance by April 1, 2018.

South Africa's Competition Commission has refused the proposed alliance saying that the merger would increase the likelihood of coordination, as it creates further structural linkages in the container liner market. The Commission also found that the proposal creates a platform for coordination in the car carrier market which has a history of collusion involving the companies. Various Japanese companies have already been prosecuted in some jurisdictions, while investigations are underway in others. 

The new company will have offices in Japan, Singapore, Hong Kong, London, United States (Richmond, VA), and Brazil (Sao Paulo).

The new company is expected to commence services from April 1, 2018. Consultancy Drewry says the network would become the sixth largest container carrier in the world.