Japanese lines expect South African approval for ONE

Nippon Yusen KK

The three Japanese carriers – K Line, MOL and NYK – have said they expect to obtain approval from the South African authority for the merger of their container shipping businesses, following an earlier rejection by the country’s competition commission. 

K Line, MOL and NYK are in the midst of setting up Ocean Network Express (ONE) by combining their container shipping businesses with operations scheduled to start on 1 April 2018.

“In the Republic of South Africa, the new company (ONE) expects to complete the approval process for compliance with competition law before the service commencement date of 1 April 2018,” the three lines said in a joint statement.

The Competition Commission of South Africa made a surprise decision to reject the establishment of ONE, based on findings on the impact that it will have on the container shipping market and adjacent car carrier market, where the three lines have been found guilty of collusion in some markets, and are under prosecution in others.

The Japanese lines responded by saying they had engaged the South African authority to review the decision.

Apart from South Africa, the set up of ONE has thus far received approvals for compliance with local competition laws in regions and countries where compliance is required.

The three Japanese lines added that “progress is being made towards completing the establishment of the new integrated container shipping business”, and reiterated that the service commencement date for ONE remains unchanged on 1 April 2018.

Analyst Alphaliner recently suggested that should the South African authority maintain its rejection of ONE, the Japanese lines could simply quit that market altogether as the market only accounted for 4% of their total globally deployed capacity.  

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