ONE Announces Major Acquisition!
ONE has signed a definitive agreement to acquire 51% stakes in TraPac LLC and Yusen Terminals LLC, currently held by Mitsui O.S.K. Lines and Nippon Yusen, respectively.
On December 27, Ocean Network Express (ONE) announced that it had acquired majority stakes in several container terminals on the U.S. West Coast.
According to the announcement, ONE has signed a definitive agreement to acquire 51% stakes in TraPac LLC and Yusen Terminals LLC, currently held by Mitsui O.S.K. Lines and Nippon Yusen, respectively.
TraPac LLC is a terminal operator providing container terminal services at the ports of Los Angeles and Oakland. Yusen Terminals LLC primarily provides terminal services at the Port of Los Angeles.
ONE said the acquisition is an important step in further integrating its parent companies’ container shipping businesses into ONE.
ONE explained that the pandemic has prolonged tight conditions in the supply chain, further highlighting the importance of container terminals in keeping global trade flowing. The newly acquired container terminals will safeguard ONE’s operational capabilities at key ports while enabling it to improve its service capabilities.
The transaction is also subject to approval from the relevant authorities.
The container shipping industry is currently facing a series of challenges. Some industry insiders have expressed concern about the market outlook for 2023, and some shipping lines have begun scaling back their operations in response.
ONE’s decision to make an acquisition at this time also reflects the company’s stance in the current market environment.
ONE CEO Jeremy Nixon recently said that the current “cooling” in demand in the container shipping market is not surprising.
“Overall, one thing we’ve learned in this industry is that things go up and down. When we see volumes decline, it also means that at some point, volumes will eventually pick up again.”
Jeremy Nixon said ONE would release more capacity when market demand recovers. He also expressed optimism that demand in the container shipping market would rebound in 2023.
Regarding contract rates for the new year on trans-Pacific routes, he also expressed optimism, expecting retailers’ current inventory replenishment plans to boost the recovery in demand and create favorable conditions for contract rate negotiations.
ONE’s financial report for the first half of fiscal year 2022 (April-September 2022) showed that the company generated revenue of $18.386 billion, up 38% year over year; net profit after tax was $11.019 billion, up 63%; and earnings before interest, taxes, depreciation and amortization (EBITDA) were $11.702 billion, up 56%.
