Japan’s three largest shipping companies have announced that they would merge their shipping operations, effective July 1, 2017, according to various news outlets.
The joint venture between Nippon Yusen (NYK), Mitsui O.S.K. Lines (MOL) and Kawasaki Kisen Kaisha (K Line) is expected to save $1.5 billion a year. The three plan to invest roughly $28 billion of both cash and assets into the joint venture, which will become the world’s sixth largest maritime carrier.
The companies attributed their decision to sluggish cargo demand, low oil-prices and an oversupply of capacity which has led most shipping lines to record losses. The Japanese
companies’ membership of The Alliance and similar company cultures also played a role in the decision.
