Dive Brief:
- Japan-based shipping company Nippon Yusen Kabushiki Kaisha (NYK) announced it would sell its air cargo business to Ana Holdings, Inc., according to a March 7 release.
- While NYK purchased Nippon Cargo Airlines in 2010 with the intention of becoming a comprehensive logistics company across all modes, the air freight’s turbulent market led to expansion challenges due to “considerable expenditure” for labor and equipment, according to the statement.
- ANA expressed interest in adding NCA to its business portfolio in order to “dramatically enhance its international air cargo network” to respond to supply chain needs, NYK said in the release.
Dive Insight:
While NYK plans to sell its NCA subsidiary to offset costs amid a declining market, other ocean shipping lines continue to strengthen their air freight operations in a bid to become end-to-end supply chain providers.
MSC Air Cargo, for instance, launched commercial operations in late November using the first of four 777 freighters. Meanwhile, Maersk plans to receive two aircraft deliveries from lessor Air Transport Services Group this year, and has already taken delivery of three, according to a recent earnings call.
However, growth may be coming at a slower pace than anticipated as air cargo demand continues to drop MoM, with capacity surpassing pre-pandemic levels in February.
Lars Jensen, CEO and partner at Vespucci Maritime, said in LinkedIn post that the NYK sale appears to be "a move opposite the prevailing 'fashion' of container lines investing into airfreight," though noted that shipping line ONE was not involved in the transaction. Nonetheless, it showcases the "challenges involved in running a successful airfreight operation,” he said.
