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FMC Rejects Japanese Lines’ Merger over Jurisdiction Concerns

(Edwin Lopez – Supply Chain Dive)

The Federal Maritime Commission (FMC) on Wednesday rejected the “Tripartite Agreement” by Kawasaki Kisen Kaisha (K Line), Nippon Yusen Kaisha (NYK) and Mitsui O.S.K. Lines (MOL) to jointly conduct business on the grounds the regulator did not have the authority to approve the proposal.

The Commission found the parties were creating a “merged, new business entity,” which the FMC cannot review. reports the U.S. Justice Department (DOJ) would be responsible for approving the deal. 

Prior to the ruling, the agreement would have entered into effect May 8, 2017, allowing the companies to establish the joint-venture company by July 1, 2017, and begin operations April 1, 2018. The FMC ruling does not affect an eventual DOJ decision on the matter. Click here to read more.

Related: Container Segments for Japan’s ‘Big Three’ Carriers Sink Deeper into the Red (American Shipper)