ONE wraps up stake acquisition in US West Coast and Rotterdam terminals

Singapore-based container shipping company Ocean Network Express (ONE) has completed the acquisition of a 51% stake in TraPac LLC and Yusen Terminals LLC on the US West Coast, and a 20% stake in Rotterdam World Gateway (RWG), after clearing all regulatory hurdles.

The move is being pursued as ONE works to bolster its presence in the global supply chain and safeguard its access to terminal capacity in these strategic gateways.

TraPac and YTI are container terminal operators and vessel stevedores that provide container terminal services in Los Angeles and Oakland, California. Both terminals are equipped with the latest technology and they have a combined capacity of 4.3 million TEU annually.

RWG operates a highly automated container terminal in the Port of Rotterdam with an annual capacity of 2.6 million TEU.

“Container terminals are a critical link in the supply chain with the unique ability to cushion the impact of operating disruptions. ONE will leverage these terminals to help customers manage supply chain disruptions and improve service quality. In addition, these assets will enable ONE to deliver faster and more reliable service to our customers,” Hiroki Tsujii, Managing Director of ONE’s Product & Network Division, said.

With the completion of these three acquisitions, ONE has established a presence in three key strategic locations: the US West Coast (Trapac, YTI), North Europe (RWG), and South East Asia (Magenta Singapore Terminal). 

The company, which was formed through the merger of three legacy shipping firms MOL, K Line and NYK, passed the five-year milestone since its establishment in 2022.

Over the past three years, the company has actively pursued investments in new ships, with 54 vessels in total. Already, 20 of these ships are in operation, while the remaining 30+ will be delivered between 2024 and 2026.

The majority of the new ships range from 12,000 to 15,000 TEU in size, making them ideal for both the east-west and north-south trade routes. 

 As part of the second stage of its development, ONE aims to invest around $20 billion over a ten-year period from 2020 to 2030. This investment will be allocated towards new ship types, equipment, digitalization, and talent development.

As part of its investment plans, ONE is looking at the containership value chain such as container terminals as a way of stabilizing and reducing volatility in its performance.

Speaking of the volatility of the container shipping sector, overordering in previous years and the global economic recession have brought about a process of normalization in the market. This has resulted in stagnant freight rates at elevated costs as demand subsided after the COVID boom.

As a result, ONE reported a Q2 2023 profit drop from $5.5 billion to $187 million, a drop of over 97 percent.

For the full year, ONE expects to report a profit after tax of $851 million, a $14.1 billion drop from the previous year, due to the deterioration of the freight market caused by declining demand.