Japan’s Trio Gets Nod for Container Shipping JV

The Competition Commission of Singapore (CCS) has granted its approval for the containership joint venture proposed by Japan’s big three container shipping companies in October 2016.

Kawasaki Kisen Kaisha (K Line), Mitsui O.S.K. Lines (MOL), and Nippon Yusen Kabushiki Kaisha (NYK Line) jointly applied for a decision by CCS on whether the creation of the JV would infringe the prohibition in the Competition Act against anti-competitive mergers.

Under the JV, the parties plan to merge their container liner shipping business, and their container terminal services businesses outside Japan. The only overlapping service of the parties that would affect Singapore is the provision of container liner shipping services, according to CCS.

The parties also provide logistics services, bulk shipping, car transport, and liquid transport, through their subsidiaries. However, such services will continue to be conducted by the companies separately and independently from each other and the JV.

CCS concluded that the creation of the joint venture, if carried into effect, “will not infringe the prohibition in the Act against anti-competitive mergers.”

“The JV is unlikely to increase the possibility of anti-competitive coordination given the large number of liners and low market concentration that would continue to exist post-JV,” CCS informed, adding that the clearance decision on the proposed joint venture was issued on March 14, 2017.

The parties earlier said that the new joint-venture company would operate a fleet totaling 1.4 million TEUs, placing the new company as sixth in the market with approximately 7% of global share.

K Line and MOL, which will each hold 31 percent, and their compatriot NYK Line, which will hold the remaining 38 percent, plan to establish the new joint-venture company on July 1, 2017, while business commencement is expected to start as of April 1, 2018.