Dive Brief:
- Japanese lines Kawasaki Kisen Kaisha (K Line), Nippon Yusen Kabushiki Kaisha (NYK), and Mitsui O.S.K. Lines (MOL) will jointly operate as the Ocean Network Express (ONE), the companies announced Wednesday. ONE will begin its services on April 1, 2018.
- The joint venture, announced November 2016, will create the sixth largest carrier by size with a total capacity of roughly 1.4 million TEU and control about 7% market share, per Alphaliner data. The merger also includes the lines' international terminals, The Loadstar reports.
- Stakes in the joint venture are divided by carrier size, with NYK, owning fleet capacity of 592,000 TEU, at 38%, and K line and MOL at 31% each, with capacities of 358,000 and 491,000 TEUs, respectively. The U.S. office will be based in Richmond, VA.
Dive Insight:
The announcement of the joint venture's name, previously colloquially dubbed as the "J Lines" or legally as the Tripartite Agreement, is the latest step in the three lines' efforts to merge in order to be more competitive in a consolidating industry.
ONE was approved by regulators in Singapore in April, but must still secure approval from antitrust agencies in the U.S., China and Europe before being able to begin operations. However, the lines received an unwelcome surprise from the Federal Maritime Commission (FMC) earlier this month, when the agency rejected the members' request to jointly operate in advance of the full merger on grounds of jurisdiction. The Department of Justice will now be responsible for approving or denying the joint venture. The lines had hoped to start their joint venture as early as May 8, 2017, to begin operating in July, 2017.
On the surface, the new name may just be an effort to re-brand and simplify how partners refer to the merging lines. However, the April 1, 2018 service commencement date indicates the lines are prepared for further delays to their plans, potentially due to the May surprise by the FMC.
