Three shipping lines, NYK, Mitsui OSK and Kawasaki Kisen Kaisha, are to merge their container shipping operations into a new joint venture.
The move will create an organisation with a fleet size of some 1.4 million TEU, making it sixth in the global container market with seven per cent share.
NYK will have a 38 per cent stake in the new company while Kawasaki Kisen Kaisha and Mitsui OSK will each have a 31 per cent share. The deal includes fleets and share of terminals.
The move follows the financial collapse of Hanjin Shipping of South Korea in August.
In a statement, the three companies said that: “Although growing modestly, the container shipping industry has struggled in recent years due to a decline in the container growth rate and the rapid influx of newly built vessels.
“These two factors have contributed to an imbalance of supply and demand which has destabilized the industry and has created an environment that is adverse to container line profitability. To combat these factors, industry participants have sought to gain scale merit through mergers and acquisitions and consequently the structure of the industry is changing through consolidation.
“Under these circumstances, three companies have now decided to integrate their respective container shipping on an equal footing to ensure future stable, efficient and competitive business operations.”
The plan is that the joint venture will come into being on 1st July 2017 and start operations on 1st April 2018.