THE merger of Japan's "K" Line, MOL, and NYK, will create the world's sixth-biggest container line, with the top seven lines controlling 65 per cent of global capacity by 2018, according to Alphaliner.
The top seven are expected to widen the gap even further with the rest of the market in the coming years, said the Paris-based research house.
The merged Japanese carrier will operate 1.37 million TEU with a global market share of 6.6 per cent, based on Alphaliner's assessment of the capacity operated by the three carriers as at October 31.
The joint venture is not expected to be operational until April 2018, subject to regulatory approvals. A total of US$2.9 billion will be invested in the new operation, which includes ships and terminals, with NYK owning 38 per cent and MOL and "K" Line holding 31 per cent each.
Alphaliner said the move will end almost five decades of rivalry between the Japanese carriers in the container shipping business.
Six Japanese carriers entered the container shipping market from 1968 to 1970, and after several mergers and acquisitions, the fierce competition between the three that were left continued from 1991 until this week's JV agreement.
"The recent wave of consolidation among their rivals, including the acquisition of APL by CMA CGM, the merger of Cosco with CSCL as well as the planned combination of Hapag-Lloyd with UASC, might have prompted the Japanese carriers to finally resolve their differences, while the bankruptcy of Hanjin Shipping in late August this year further emphasised the risk of continued inaction, said Alphaliner.
Source : HKSG.