Company history

In May 1884, ninety-three shipowners in western Japan merged their businesses into Osaka Shosen Kaisha. It grew on the coastal and near-sea routes — the Inland Sea, Kyushu, the Korean peninsula — and before the war stood second in Japanese shipping only to Nippon Yusen. Its eventual partner had an entirely different parentage: Mitsui Line was spun out of the shipping department of Mitsui & Co. in 1942 to carry the trading house’s cargo on deep-sea routes.

The distance between them was the point. One company’s ships worked close to home, the other’s crossed oceans, and their route maps barely overlapped — so combining them would add scale without adding competing tonnage. That asymmetry would decide who each of them chose when the state came to reorganize the industry.

Under the 1963 law that reorganized Japanese shipping into six groups, Osaka Shosen and Mitsui Line merged as equals in April 1964 into Osaka Shosen Mitsui Senpaku — capital of ¥13.1 billion, 86 ships, 1.27 million deadweight tonnes. The state set the framework; the company chose the partner, and it chose the one whose routes it did not already serve. Sailings on the New York service doubled, agencies were unified, and Sumitomo and Mitsui banking relationships sat side by side behind the shippers.

What the combined fleet was built to do was carry raw materials under contract: iron ore, coal and grain in dry bulk, crude oil for the oil majors, and liquefied natural gas on very long charters to the electric utilities. Spot trading remained, but the centre of gravity was the long-term contract — the deliberate answer to an industry whose profits swing with tonnage supply and freight rates.

The 1990s brought a second consolidation, and a rule about how to grow. Adding ships of your own, President Ikuta argued, disturbs the market you sell into; better to take on someone else’s fleet, which adds scale without adding total tonnage. A 40% stake in Gearbulk, the purchase of Tokyo Marine, an LNG shipping company bought from Burmah of Britain, and finally the equal merger with Navix Line in April 1999 — after which the company took the name Mitsui O.S.K. Lines, ending thirty-five years of carrying both predecessors’ names. Japanese shipping was now three big groups, and MOL had one of the largest fleets in the world in dry bulk, tankers and LNG.

In 2004 MOL took control of the property company Daibiru through a tender offer, adding rental income from prime Osaka office buildings to a portfolio that otherwise rose and fell with freight rates. Long-term contracts of affreightment plus real estate — that pairing became the shape of the company’s earnings.

Then came the resource boom. China’s demand lifted the seaborne trade in iron ore and coal, Capesize rates sat at historic highs, and in the year to March 2008 MOL earned ¥302.2 billion of ordinary profit and ¥190.3 billion of net profit, its best result ever, with ¥268.6 billion of that operating profit coming from the bulk and specialized carriers alone. The figure became the reference point every later plan was measured against.

In the same accounts, the container line contributed ¥1.3 billion. It had lost ¥2.9 billion the year before and would lose ¥23.3 billion in the year to March 2009. When bulk was strong the drag was invisible; when the whole market fell, the structural unprofitability of liner shipping showed plainly. It was not MOL’s problem alone — European and Chinese carriers were merging into ever larger fleets, and none of the three Japanese lines could match that scale on its own. In 2013, after two consecutive loss-making years and ¥125.4 billion of write-downs on ship values, President Muto Koichi reversed his own position and began shifting deliberately toward medium- and long-term contracts, above all in LNG.

In October 2016 MOL, NYK and K Line agreed to combine their container businesses, and in July 2017 they founded Ocean Network Express in Singapore — NYK 38%, MOL and K Line 31% each. From April 2018 the container business left MOL’s consolidated accounts and became an equity-method associate. The first year was poor, hurt by systems integration. Then the pandemic broke the supply chain: congestion on the US West Coast, containers stuck out of position, a surge in seaborne consumer goods, and spot rates several times their historical average. ONE’s profits exploded, and MOL’s consolidated ordinary profit for the year to March 2022 reached ¥721.7 billion — seven times the previous year, most of it equity income from a company in which it holds under a third of the shares.

What to do with a windfall it had not controlled became the central question of management. Hashimoto Tsuyoshi, president from April 2021, answered it in April 2023 with a plan called BLUE ACTION 2035: pre-tax profit of ¥400 billion and total assets of ¥7.5 trillion by fiscal 2035, and an identity no longer confined to shipping — a global social-infrastructure company. The money went into assets that earn under contract rather than under a rate: LNG carriers, floating storage and regasification units, offshore wind. The first phase set an investment frame of ¥1.2 trillion for 2023–2025, of which roughly ¥1.1 trillion had been committed by March 2024.

Having crossed the peak of that investment, MOL turned to what remained on the balance sheet. Equity had risen roughly fivefold in five years, and in 2026 the activist investor Elliott called for ¥300 billion of buybacks and questioned whether the property subsidiary and the ownership of ships belonged inside the company at all. MOL adopted a progressive dividend and a 40% total return ratio — a firm commitment by the standards of a cyclical industry, and an unfinished argument about how much capital a company that still loses money at the bottom of the cycle should hold against the next one.