Containerships:自業自得 (“One’s act, one’s profit”)

Ocean Network Express (ONE) has started operations as scheduled, after the individual container operations of K Line, MOL and NYK transitioned into single joint operation on 1 April, the same day MOL marked its 134th anniversary. The new ocean carrier ONE operates a fleet of around 230 containerships with a total capacity of 1.49 Mn Teu, operating 85 services.

Japan’s big three shipping lines completed payments on 2 April and established their Singapore-based container line joint venture. The combined fleet of ONE has a global capacity share of 6.8 per cent, which makes the shipping line the sixth-largest carrier in the world, just behind Hapag-Lloyd.

The three carriers paid USD 3 Bn in total with NYK Line contributing 38 per cent and the other two lines 31 per cent each, as mentioned in a joint statement. All the investment was paid in cash, which has been the only change from the original plan when the three initially pledged assets instead of finance. Additional assets will be injected by the shareholders into ONE, including vessels, equipment and terminals, to be transferred at market value at a later date in the future.

ONE was originally established in July 2017, a year to be remembered for the decisive liner industry consolidation that took place. In parallel to the establishment of ONE, China Cosco’s announced the takeover of Hong Kong’s Orient Overseas Container Line (OOCL), a deal that yet needs to be confirmed.

“The start of services marked a momentous day that will open a new chapter in the history of MOL, as well as Japan’s marine transport industry as a whole,” MOL chief executive Junichiro Ikeda noted. In an anniversary message Ikeda said MOL would focus on price competitiveness as a critical benchmark in its “Rolling Plan 2018” strategy.

“With this in mind, we will work squarely to enhance the cost competitiveness of our fleet and enhance business efficiency through business process reforms. We will explore ways of raising capacity utilisation of ships, not just reducing their cost,” Ikeda added. Robotic process automation will be included, with MOL hoping to use robots to streamline routine tasks. The move towards greater efficiency will be considered “without being bound by past practices or keeping any areas off limits to reforms in an effort to enhance the competitiveness of our fleet for the current and coming era”.


Fotios Katsoulas

Head of Research, Affinity Shipping LLP Posted on 9 Apr 2018| 14:26 (GMT+1)
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