>> MDST's projections for 2017.more.

>> SM Line - its first months.more.

>> North American East Coast Port Expansion.more.

>> Japan-EU Trade Deal.more.

>> The Ocean Network Express.more.

>> The Qatar crisis: impact on container shipping services.more.

>> Maritime Professional Services Award.more.

>> Invest in rail freight to cut road congestion.more.

>> South Bradford Lorry Parking Study.more.

>> New Mega Alliances.more.

>> Businesses have their say on freight transport in the Marches.more.

>> Free trade zones at UK ports & airports.more.

>> Non alliance shipping lines.more.

>> New mega alliances.more.

>> Transpacific - port coverage from April 1st.more.

>> Are direct services becoming less attractive for shipping lines?. more.

>> What happens to the small ships post Panama Canal expansion?. more.

>> Maersk to acquire Hamburg-Sud and reinforce its presence on the Latin America routes. more.

>>£0.5 trillion of trade passes through UK ports. More.

>> The future of rail freight and private investment. More.

>> The Northern Freight and Logistics report. More. 

>> Oxford Cambridge Expressway Study. More.

>> The potential impact of Brexit on trade. More.

>> India - the impact of shipping lines’ consolidation and the cabotage rule change. More.

>> Iran – changes in maritime services post-sanctions. more.

>> 'India: The only way is up' say MDST in an article published by Lloyds List. More.

>> Hanjin’s collapse - A wake-up call to the industry? More.

>> Peak season 2016: could the seemingly more rational shipping lines restore stability to the market?. More.

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Japan-EU Trade deal

The EU and Japan reached an agreement in principle over the main elements of JEEPA (Japan-EU Economic Partnership Agreement) last July, having begun negotiations in 2013. At a time when protectionism, characterised by the Trump administration’s withdrawal from multi-lateral deals such as the TPP (Trans-Pacific Partnership), and Brexit in the UK, the agreement between the EU and Japan (along with the previously agreed EU-Canada deal) is seen as  welcome news for those advocating international cooperation and free trade. The JEEPA has been labelled by some commentators as ‘cars for cheese’ with EU nations hoping to increase their exports of agricultural and food commodities to Japan, whilst in the other direction Japanese automobile companies are intending to export their vehicles tariff free.

Chart 1: Japan road vehicle exports (Loaded TEU) to EU Countries 2006-2016

Source: MDS Transmodal, World Cargo Database August 2017

Road vehicles exported by Japan to the EU have decreased by 25% (92,897 to 69,300teu) from 2006 to 2016 (as shown in Chart 1), whilst competing South Korean car manufacturers have almost doubled their exports over the same period.  The South Koreans, who also compete with the Japanese in the electronic appliance industry, have had a tariff free trade deal in place with the EU since 2011.

With a removal of the existing 10% tariff on EU imported cars there is scope for Japanese car manufacturers to relocate some of their outsourced plants back to Japan, particularly those in the UK whose future access to EU single market remains in doubt given the Brexit situation.

The potential for importing Japanese manufactured cars at a reduced price has raised concerns from European car manufacturers; however, Japan is harmonizing its vehicle standards with International regulations, so that EU type-approved vehicles can be sold in Japan without the need for costly certification and modification. EU car exports to Japan have increased by 4.6% (14,996 to 15,691teu) during the period from 2006 to 2016.

Chart 2: EU Food commodity exports (Loaded TEU) to Japan 2006-2016

Source: MDS Transmodal, World Cargo Database August 2017

EU food exports to Japan have increased by 18% (Chart 2), although for some commodities such as beverages there has been a decline of 24% from 2006 to 2016. France which specialises in wine production has seen its beverages exports to Japan drop from 24,798teu to 13,334teu, whilst non-European countries such as Chile and New Zealand have experienced large increases of over 500% and 300% respectively between 2006 and 2016.

The UK’s largest export commodity to Japan is Cereals & Preparations which experienced an increase of 13% from 2006 to 2016, however the UK’s future outside the EU may put its competitiveness in jeopardy with competing countries being exempt from tariffs.

The container shipping industry has been characterised by the influx of larger vessels and consolidation in the form of alliances, partnerships, mergers and acquisitions amongst the shipping lines.

Table 1: List of container shipping services calling in EU-Japan ports, 2007Q3 & 2017Q3


Average of TEU

Sum of Deployed TEU


































Source: MDS Transmodal, Containership Databank August 2017

The number of services operating between Japan and the EU has decreased by 71% over the last decade (2007-2017) and the deployed capacity (TEU) has decreased by 52% in the same period, as shown in Table 1. Of the three main East-West shipping lines (2M Alliance, Ocean Alliance and THE Alliance) only 2M and THE serve Japan directly from the EU. Whilst average vessel size deployed on the Japan-Europe services has increased by 95% during the period 2007 to 2017, the average size remains smaller than that deployed on other Asia-Europe routes by 15% (13,576 TEU); mainly those calling into China. The larger vessels on the China routes bring with them a competitive advantage over the smaller ones deployed on the Japan routes. To access the benefits of the economies of scale that the ULCS (Ultra Large Container Ships) provide, Japanese shippers often have to rely on transhipment from another East or South East Asian port such as Busan, Shanghai or Singapore.

In our previous Briefing we investigated the merging of Japan’s three largest shipping lines; K-Line, MOL and NYK into the Ocean Network Express. With each of the lines already being in THE Alliance the impact on deep sea services will be limited however ONE’s role in providing adequate service connections to major Far East transhipment ports will be important for Japanese trade to and from the EU.

The JEEPA is a way in which the EU and Japan can make their specialised commodities more attractive to each other, under pressure from emerging and competitive countries that have been able to sell more of their products at lower prices. Additionally through JEEPA both the EU and Japan can strengthen themselves in the midst of isolationist processes outside of their control such as the UK decision to leave the EU and the US withdrawal from the TPP.