Carving the container business into ONE, ending 50 years of self-operation (2016)

The aftertaste of letting the main business go

The year before the merger, president Murakami Eizo was describing container shipping as a business in which, “once you have started, you cannot easily decide to withdraw or scale back.” Owning the terminals and the inland transport yourself, the reasoning went, means you cannot simply fold. The following year, that same man was on the side carving out a business that accounted for half of sales. Seven losing years out of ten, more than ¥100bn of divisional losses, and a situation in which even falling under foreign ownership was being discussed appear to have rewritten his own premise.

The carve-out was not, however, an end to dependence. Of the record profit of ¥642.4bn in the year to March 2022, the company’s own operating profit was only ¥17.7bn; the earnings came through ONE, from container shipping. It receives most from the business it let go, and when freight rates normalize what it receives shrinks with them. Only when the operating profit of the ships it runs itself reached ¥102.9bn in the year to March 2025 could one say a second leg was finally standing. How the decision to fold is judged will be settled by how far that leg extends.