Merging the container lines of Japan’s top three shipping companies would be a sound strategic and economic move, according to container shipping analyst Alphaliner. Spinning off the liner fleets of MOL, NYK and “K” Line is an option in the face of mounting losses in the container sector, said MOL President Koichi Muto.
The consolidation would create the world’s fourth-largest ocean carriers, after Maersk, MSC and CMA CGM, with a market share of 7.5 percent compared to the three Japanese companies individual shares of between 2.2 percent and 2.8 percent, Alphaliner said.
“We [have] roughly studied such a possibility,” Muto said last week after saying MOL is set to lose $51 million this year. Merger negotiations haven’t taken place yet, but cannot be ruled out in the future.
A Japanese “mega-line” would be market leader on the Far East-North America trade, the second largest carrier on the Far East-South America and Far East-Oceania routes, and number three on the Asia-North Europe and intra-Far East markets.
None of the Japanese carriers currently commands a top-three position in any of their key markets. A merger would be the first major consolidation in the industry since 2005 when A.P. Moller-Maersk acquired P&O Nedlloyd and Hapag-Lloyd bought CP Ships.
“Over the last six years, there have been no significant changes in the composition of the main carriers in the container market, while margins have eroded due to excessive competition,” Alphaliner said.