Tuesday, March 28, 2017

Singapore Authorities OK Freight Container Lines Joint Venture

Japanese Shipping Lines Will Combine Operations This Year
Shipping News Feature
SINGAPORE – The Competition Commission of Singapore (CCS) has cleared the proposed joint venture between Nippon Yusen Kabushiki Kaisha (NYK) and Mitsui O.S.K. Lines (MOL), and Kawasaki Kisen Kaisha (K Line). Following the demise of South Korean shipper Hanjin, more and more shipping lines have been looking for ways to maintain any semblance of a competitive advantage to stave off any similar repercussions, and as a response Japan’s three largest container shipping lines sought clearance from antitrust authorities worldwide to merge their box freight businesses and container terminal services arms.

In examining the impact of the joint venture on the global supply of container liner shipping services for intra-Asia trade routes, and for trades involving the East Asia region, which includes Singapore, as both origin and destination with various other regions around the world such as Europe and North America, the CCS conducted a public consultation and sought feedback from vessel operating common carriers, non-vessel operating common carriers, and beneficial cargo owners.

After reviewing the parties’ submissions and the feedback received, the CCS concluded that the creation of the joint venture (JV), if carried into effect, will not infringe the prohibition in the country's Competition Act against anti-competitive mergers.

From 1 July 2017 the three will operate a joint venture company which plans to begin operations as from 1 April 2018. MOL and K Line will each hold 31% shares with NYK having the remaining 38% and the deal applies only to the container operations, not their RoRo auto shipping arms nor any of their respective short sea and domestic, oil and gas carrying or dry bulk divisions or heavy lift and logistics operations.