{"id":127,"date":"2017-08-21T12:31:08","date_gmt":"2017-08-21T12:31:08","guid":{"rendered":"http:\/\/www.freightcrunch.com\/blog\/?p=127"},"modified":"2017-08-27T18:32:39","modified_gmt":"2017-08-27T18:32:39","slug":"japanese-and-korean-carriers-to-merge","status":"publish","type":"post","link":"http:\/\/www.freightcrunch.com\/blog\/2017\/08\/21\/japanese-and-korean-carriers-to-merge\/","title":{"rendered":"Japanese and Korean Carriers to Merge"},"content":{"rendered":"<p class=\"Body\" style=\"line-height: 120%;\">Recently, we discussed how US and European shipping companies were being forced to merge or accept takeovers in order to survive. However, it seems as though these types of changes are happening all over the world with many Japanese and Korean carriers discussing the same sort of deals. Hyundai Merchant Marine, the largest carrier in South Korea, recently announced a deal to bring numerous vessels to the US but this was overshadowed by a much larger deal.<\/p>\n<p class=\"Body\" style=\"line-height: 120%;\"><b>Memorandum of Understanding<\/b> &#8211; At the beginning of August, no less than 14 container carriers in South Korea signed a memorandum of understanding. Why? Above all else, this deal will see the launch of the Korea Shipping Partnership (KSP); a program designed to allow the companies to work together to improve their strength as a group rather than individuals. Ultimately, the KSP wants to add new shipping routes, co-manage overseas terminals, and increase the shared cargo capacity.<\/p>\n<figure id=\"attachment_137\" aria-describedby=\"caption-attachment-137\" style=\"width: 800px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-137 size-full\" src=\"http:\/\/www.freightcrunch.com\/blog\/wp-content\/uploads\/2017\/08\/20121012_140510-12.jpg\" alt=\"Japanese and Korean Carriers to Merge\" width=\"800\" height=\"505\" srcset=\"http:\/\/www.freightcrunch.com\/blog\/wp-content\/uploads\/2017\/08\/20121012_140510-12.jpg 800w, http:\/\/www.freightcrunch.com\/blog\/wp-content\/uploads\/2017\/08\/20121012_140510-12-300x189.jpg 300w, http:\/\/www.freightcrunch.com\/blog\/wp-content\/uploads\/2017\/08\/20121012_140510-12-768x485.jpg 768w\" sizes=\"auto, (max-width: 800px) 100vw, 800px\" \/><figcaption id=\"caption-attachment-137\" class=\"wp-caption-text\"><em>Japanese and Korean Carriers to Merge<\/em><\/figcaption><\/figure>\n<p class=\"Body\" style=\"line-height: 120%;\">Along with SM Line and Hyundai Merchant Marine, some of the biggest South Korean shipping companies signed the memorandum which will see guidelines decided towards the end of the year before being implemented in January 2018. After the shocking bankruptcy of Hanjin Shipping, which seemed to shake Asia\u2019s shipping prowess somewhat, the aim of the partnership is to restore South Korea\u2019s presence on the global market; at the time, Hanjin Shipping sat seventh on the list of the largest carriers in the world.<\/p>\n<p class=\"Body\" style=\"line-height: 120%;\"><b>Triple Merger<\/b> &#8211; Of course, all who follow the industry will know about the ongoing situation with NYK, K Line, and MOL. With three of the biggest Japanese shipping lines looking to merge, all seemed to be going well before the US Federal Maritime Commission (FMC) rejected the merger on \u2018jurisdictional grounds\u2019. However, after a sticky process and a nervous few weeks for all involved, it was decided the three companies would merge completely and operate as the Ocean Network Express (ONE). If all goes to plan, the business will begin operations at the beginning of April 2018.<\/p>\n<p class=\"Body\" style=\"line-height: 120%;\">With capacity of around 1.4 million TEU, ONE will become the sixth largest carrier in terms of size alone and they\u2019ll also boast a 7% share of the global market. All things considered, the merger, although difficult in theory, is actually a rather fair one with NYK accounting for 38% of fleet capacity and MOL and K Line offering 31% each. In the years ahead, ONE will certainly look to put Japan back on the shipping map and it\u2019ll be an interest watch to see how they perform as one.<\/p>\n<p class=\"Body\" style=\"line-height: 120%;\"><b>Further Mergers?<\/b> &#8211; According to the CEO of Hyundai Merchant Marine, shipping companies are on a path that requires improved efficiency and a reduction in costs. Back in January in a speech to his employees, Yoo Chang-Keun openly admitted that 2017 would be a difficult year for Asian shipping as a whole. In addition to this, the CEO of Maersk, Soren Skou, also admitted the market was changing and that building new ships and buying new capacity was no longer an effective method of achieving growth.<\/p>\n<p class=\"Body\" style=\"line-height: 120%;\">With all of this in mind, we could very well see more mergers in Japanese and Korean carriers and the rest of the world as companies fight for survival. According to Skou, many of the biggest shipping companies haven&#8217;t been profitable for a long time so this market of merging or the biggest companies acquiring in order to survive could very well shape the market in the coming years!<\/p>\n<p class=\"Body\" style=\"line-height: 120%;\"><b><i>Sources<\/i><\/b><i><\/i><\/p>\n<p class=\"Body\" style=\"line-height: 120%;\"><a href=\"http:\/\/www.supplychaindive.com\/news\/ocean-network-express-ONE-K-line-MOL-NYK-april-2018\/443906\/\"><i>http:\/\/www.supplychaindive.com\/news\/ocean-network-express-ONE-K-line-MOL-NYK-april-2018\/443906\/<\/i><\/a><\/p>\n<p class=\"Body\" style=\"line-height: 120%;\"><a href=\"https:\/\/www.bloomberg.com\/news\/articles\/2017-01-03\/swim-or-sink-outlook-prompts-asia-shipping-lines-to-face-mergers\"><i>https:\/\/www.bloomberg.com\/news\/articles\/2017-01-03\/swim-or-sink-outlook-prompts-asia-shipping-lines-to-face-mergers<\/i><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Recently, we discussed how US and European shipping companies were being forced to merge or accept takeovers in order to survive. However, it seems as though these types of changes are happening all over the world with many Japanese and Korean carriers discussing the same sort of deals. Hyundai Merchant Marine, the largest carrier in [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":136,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[5],"tags":[84,79,81,83,76,77,78,88,86,87,82,80,85],"class_list":["post-127","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-mergers-acquisitions","tag-biggest-south-korean-shipping-companies","tag-carriers-merge","tag-further-mergers","tag-hyundai-merchant-marine","tag-japanese-and-korean-carriers","tag-japanese-carriers","tag-korean-carriers","tag-largest-carrier-in-south-korea","tag-shipping-companies","tag-shipping-companies-merge","tag-sm-line","tag-triple-merger","tag-us-and-european-shipping-companies"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.7 - 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