As far as container shipping is concerned, the current decade or the period since Y2K has probably seen the most number of consolidations, mergers, acquisitions and alliances than any other period in container shipping history..
While it may not have been driven by the spectacular collapse of Hanjin Shipping (2016), the resolve by the container shipping lines to consolidate their position was most probably strengthened following the collapse..
New alliances in the form of Maersk Line and MSC’s 2M (with some space for Hyundai Merchant Marine), CMA-CGM, OOCL, Cosco and Evergreen’s The Ocean Alliance, Hapag Lloyd, MOL, NYK, Yang Ming Line, and K-Line’s THE Alliance all commenced their cooperation and operation in 2017..
Within these alliances, the members were already busy with their own growth plans with Maersk Line acquiring Hamburg Sud, Hapag-Lloyd acquiring UASC (after having already merged with CSAV), Cosco acquired OOIL the holding company of Orient Overseas Container Line (OOCL)..
If you wish to know more about Modern Shipping Mergers & Acquisition head over to Xeneta’s interactive visual timeline on shipping mergers and acquisitions which gives you a pretty good view of what happened in the industry since 1999..
One more JV (probably one of the last JVs among the bigger lines) was still left to be completed and and that was the plan by the 3 Japanese carriers Kawasaki Kisen Kaisha (K Line), Nippon Yusen Kabushiki Kaisha (NYK) and Mitsui O.S.K. Lines (MOL) to create a JV called ONE (Ocean Network Express)..
But that plan was jettisoned by the US Federal Maritime Commission (FMC), followed by the South African Competition Commission in mid-2017..
While the FMC’s grounds for the rejection were based on their lack of authority to review and approve mergers, the South African case was based on concerns of potential collusion as these very three lines were found to have been part of a price-fixing cartel in their RoRo business..
Ostensibly based on the confirmation that all regulatory approvals from all necessary countries were received (or would be received as the South African decision was being appealed), on the 7th of July 2017, a joint venture holding company was established in Tokyo bringing together the container divisions of these 3 Japanese giants to form ONE (Ocean Network Express), the world’s sixth-largest container liner shipping company..
Finally on January 18, 2018, the Competition Commission of South Africa conditionally approved this joint venture paving the way for ONE to start trading..
The conditions set forth by the Competition Commission of SA precludes the JV from any collaboration on the RoRo businesses of these companies, exchange of sensitive information, shared directorship of the two business, sharing employees between the two businesses, to name a few..
ONE which will have its holding company in Tokyo and an operating company in Singapore, will operate 250 ships with a capacity of 1.38 million TEUs and will include the terminal operation businesses outside of Japan of all 3 companies..
NYK will have 38% share in the JV whereas K-Line and MOL will have an equal 31% share..
ONE will be unique from the other 3 major alliances in that, ONE more than just a strategic alliance and is not a cooperation agreement like the others..
With the creation of this JV and ONE expected to become operationally active very soon (around 1st of April 2018), will the container shipping industry take a breather as far as the consolidations, mergers and acquisitions are concerned..??
Well, no one really knows especially since there are not many other smaller global players left for the big boys to take over anymore..
Also, things are getting more and more difficult for the big boys in terms of acquisitions as has been seen from the various regulatory hurdles..
I think it is only fair that at least something (in this case 19.3%) is left for the rest of the world..
So for now at least, things seem to be settling down.. Or has it………………………?? Mr.Nostradamus..??
*** End of Article ***