Mitsui O.S.K. Lines, Nippon Yusen K.K. and Kawasaki Kisen Kaisha, or K Line, said in a statement that they are forming a joint venture to unite their shipping operations. They also are merging terminal management businesses outside Japan.
Slowing global trade combined with increased fleet sizes have caused freight rates to tank, prompting a wave of consolidation in the container industry.
The three carriers said they hoped to attain a more competitive scale through their joint venture. It will rank sixth worldwide, with a combined fleet capacity of 1.4 million TEUs, or Twenty-foot Equivalent Units, and a 7 percent global market share, they said.
Container shippers have been booking heavy losses as freight rates have sunk. The three Japanese shippers, which belong to The Alliance together with Hapag-Lloyd and the Yang Ming Line, expect to save 110 billion yen ($1.1 billion) in costs by merging.
"Due to low oil prices, sluggish cargo demand and over-supply of trade capacity, container freight rates are at historic lows," the statement said, adding that there were limits to how much the three companies could manage to save on their own.
Nippon Yusen, or NYK, will contribute 38 percent of the equity in the approximately 300 billion yen ($2.9 billion) joint venture, with Mitsui O.S.K. and K Line each providing 31 percent.
The companies' terminal operations in Japan and other businesses, such as bulk shipping, ferries and logistics will not be merged.
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