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Government Aid for Japan’s Top Three Ocean Liners

February 10, 2017

 

The Japanese Government is expanding tax incentives for the country’s shipping industry to strengthen its financial health to help the Japanese shipping lines through the turbulence.

With Ship-operating costs set to increase in 2017 as the market remains weak, the tax reforms prove another release valve for growing financial pressure.  Japan’s Big Three of MOL, NYK, and K-Line recently recorded a collective half-year operating loss of more than 20 percent year-over-year.  They also downgraded their full-year earning forecast.

It’s a matter of coincidence the measure takes effect in April 2017, when the Big Three, along with Hapag-Llody, launch the Transport High Efficiency Alliance.

In order to enable Japanese ocean-going shipping firms to compete on a level playing field with their foreign rivals, the nation’s tonnage tax system must be further expanded to cover more vessels, the shipowner’s associations has said.