MITSUI O.S.K. TO JOIN MED-ASIA CONSORTIUM

MITSUI O.S.K. TO JOIN MED-ASIA CONSORTIUM

Mitsui O.S.K. Lines, said it will join an existing vessel-sharing agreement operatingon the western-Mediterranean-to-Asia trade that includes Nedlloyd Lines, Compagnie Generale Maritime (CGM) and Malaysian International Shipping Company (MISC).

Mitsui was the last of the three carriers of the Mediterranean Far East Container Service (Mafacs) to announce its intentions on the depressed West Mediterranean-Asia trade following that group's announced breakup this summer.Mafacs, also known as the Med Club, is a vessel-sharing arrangement among Mitsui, Nippon Yusen Kaisha (NYK Line) and Lloyd Triestino di Navigazione that is set to break up by the end of the year.

Since the announcement of the breakup, Lloyd Triestino said it will team with Evergreen Marine Corp. in a seven-vessel consortium, and NYK said it will join Yang Ming Marine and Compagnie Maritime d'Affretement in a nine-vessel consortium.

Few carriers can commit enough ships on their own to offer the weekly or 10-day sailing schedules that are required to attract higher value cargoes and remain on par with competitors. Therefore, they have turned to vessel sharing as a way of maintaining a presence in the trade lane.

The consortium of Mitsui, Nedlloyd, CGM and MISC, called the Tonnage Sharing Agreement, will deploy eight vessels each with a capacity of 2,800 20- foot container units (TEUs).

Three large shipping groups will now compete on the lengthy trade route that begins in Spain and ends in South Korea, promising further developments as the groups try to best each other in service frequency and port rotation.

The Tonnage Sharing Agreement and the NYK-Yang Ming-CMA group both sail every week, while the Evergreen-Lloyd Triestino group sails every 10 days.

While the Mitsui deal was known to be in the works for the last few months, the fact that it had not been confirmed - while both NYK and Lloyd Triestino each had already gone their separate ways - raised the possibility that Mitsui had been left without a partner in the trade, which some said is endemic of the carrier's situation worldwide.

"Mitsui faces a major challenge on how it will establish global alliances such as NYK is developing" with Neptune Orient Lines of Singapore, said John Reeve, head of maritime at Mercer Management Consulting in Lexington, Ma. ''Mitsui does seem to be on the outside without a global partner."

Tom McGoldrick, Mitsui's U.S. spokesman, replied that Mitsui is building a global alliance with Nedlloyd, the Dutch carrier with which it is involved in two Pacific services and now the Med-Asia trade.

"The fact of the matter is that MOL does not rush to tell people what they're doing, but they don't sit around with these kind of assets and not manage what they are doing," he said. "It may seem that MOL was left out in the cold, but I'm sure the company had its stuff wired before making their announcement."

The Tonnage Sharing Agreement's westbound ports of call are: Pusan, South Korea; Kobe, Nagoya and Yokahama, Japan; Hong Kong; Singapore; Port Kelang, Malaysia; Jeddah, Saudi Arabia; Damietta, Egypt; La Spezia, Italy; Barcelona, Spain; and Marseilles, France.

Eastbound port calls are: La Spezia, Barcelona, Foss, Damietta, Jeddah, Singapore, Hong Kong, Busan, Kobe, Nagoya, and Yokahama. Cargo to and from Taiwan will be accepted based on transshipment to Singapore.