[110117.EN.BIZ] NYK, MOL and 'K' Line Venture Will Help Even When Market Is Poor

THE president and CEO of Japan's "K" Line, Eizo Murakami, says the decision to combine the container liner and international port operations of the nation's three major shipping companies - NYK, MOL and "K" Line will provide them with a business framework that can generate profits even when market conditions are poor.

In his review of the past year and his company's plans for the future, Mr Murakami noted that previously the three companies had decided to start joint ship assignments in their containerships businesses, primarily on the east-west routes, as members of "THE Alliance" together with Hapag-Lloyd and Yang Ming, scheduled to begin operation on April 1, according to American Shipper.

"However, given the current business environment, in which competitors cannot be defeated without significantly higher cost competitiveness, we decided to go one step further by integrating our businesses in the spirit of 'three companies operating on equal footing," he said.

The three Japanese carriers plan to form their new joint venture this July, and begin operating a joint service April 1, 2018.

"We thus decided to change to a new management structure by founding a new company. Our new containerships business strategy for the future will be as follows: To fight equally with overseas competitors that pursue economics of scale by applying cost competitiveness generated from the size of our combined fleets and integrated systems together with the sales competitiveness each of us has developed over the years," Mr Murakami said. "It is a strategy that takes a medium- and long-term perspective shared by all three companies."

NYK president Tadaaki Naito said preparation for the integration of the liner businesses of the three Japanese carriers will have a major impact on the entire NYK group, "so 2017 will be a year for bold steps toward positioning the NYK Group for the times ahead under our 'Beat the Crisis' in-house initiative. I want everyone to achieve differentiation in day-to-day operations by staying half a step ahead in each area of business."

MOL chief executive Junichiro Ikeda echoed the views of his counterparts saying that even after the integration of the container liner business of the three companies, the container liner business will be the core business of their companies.

"Our objective for the joint-venture company is to maximise its competitiveness by drawing on the best practices and outstanding aspects of all three companies. We shall further enhance the effectiveness of our systems and operations by adopting the superior ones used at NYK," Mr Naito said.

Source : HKSG.