iContainers Challenges ONE’s Ability to Harness Trio’s Strengths
- Business & Finance
Spanish online freight forwarder iContainers believes that the start of operations of the world’s newest container shipping line, Ocean Network Express (ONE), will be tested by its capability to harness synergies from the three liners it is made up of.
The joint venture, established in July 2017 in Singapore through the merger of Japan’s shipping lines, Nippon Yusen Kaisha (NYK), Mitsui OSK Lines (MOL), and Kawasaki Kisen Kaisha (K Line), commenced service on April 1, 2018.
The freight forwarder said the combined resources will give the Japanese trio larger economies of scale to allow them to access new markets.
The new Japanese line is no stranger to the industry. However, iContainers believes that the trio will face the challenge of taking on a “new brand identity”.
“Each carrier has its own strengths and weaknesses. So the trick will be to carry over the strengths,” Klaus Lysdal, Vice President of Sales and Operations at iContainers, said.
“Obviously, with three company cultures coming together into one there will be some values that will change.
“Approaches and protocol will have to be set as the trio look to take on a brand new identity. This will cost them some clients, especially those who enjoyed a certain way of working with a certain carrier.”
Through the merger, ONE is reportedly expected to cut around USD 440 million in costs in its first fiscal year of operations.
“The industry will be waiting for the operational and financial results of this merger. But at first look, it’s safe to say that it makes a lot of sense for the three to come together and join forces instead risking it on their own,” says Lysdal.
“Hopefully they’re able to clearly identify the strengths of each entity and harness the synergies created to refine their approach to clients. It’s now very much a matter of what style is adopted as the new company culture and what type of service they want to offer their clients,” Lysdal concluded.