A 50:50 Joint Venture shipping company set up between Indian Steel major Tata Steel Ltd and Japanese Shipping major NYK Line in 2007?
The history of Tata and NYK collaboration goes a long way. In the next few pages is the 1st Charter Party Contract signed between Tata and NYK. Excerpts from an article exclusively written for Gateway House: Indian Council on Global Relations….
An early Indo-Japanese business collaboration was that between Jamsetji Nusserwanji Tata, the founder of the Tata Group of companies, and Nippon Yusen Kaisha or Japan Mail Steamship Co. Ltd. It was aimed at breaking, what Jamsetji termed, an Indian Ocean shipping ‘cartel’ led by the Peninsular & Oriental Steam Navigation Company (P&O), the London-based shipping behemoth.
During a visit to Japan in 1893, Jamsetji Tata negotiated a collaboration with Nippon Yusen Kaisha (NYK) shipping company, plying two cargo ships (Annie Barrow and Lindisfarne) on the Bombay-China-Japan route, both flying the flag of Tata Lines, while NYK plied two of theirs. The cost was competitive as against P&O’s rate of Rs 19 per cubic tonne, Tata Lines charged Rs 12.This unleashed a freight war, with P&O slashing its rates to Rs 1.8 per tonne and making the unusual offer of carrying cotton goods to Japan free of cost. Loyal customers were given additional rebates. Most of Bombay’s mill-owners gradually withdrew their shipping contracts with Tata Lines. But the Japanese Cotton Buyers’Association stood by him.
Tata NYK Shipping Pte. Ltd. is a 50:50 joint venture of Tata Steel Ltd (Tata Group’s flagship Company), India’s Steel major and World’s second most geographically diversified steel producer, and NYK Line (Nippon Yusen Kabushiki Kaisha), the Japanese Shipping major and one of the largest and leading Shipping companies in the world. Tata NYK, set up in the year 2007, has a diversified, high-performance, environment friendly fleet of Japanese and other top of the line reputed shipyard built vessels – that are either on its own balance sheet or on short to long term insourcing model. By operating its own/insourced vessels through a network plan that is premeditated for value creation, the innovation primed Company delivers the requisite operational finesse and flexibility to its customers.
Moreover, its ability to trade worldwide in a multitude of trade routes, carrying a wide range of cargoes for a varied set of customers, gives it an undisputable competitive edge. Tata NYK works on comprehensive freight solutions, it looks at its customers’ quantified and implicit requirements, deliberate their strategic and tactical position and then internally work towards creating a long-term sustainable solution, keeping their short-term value intact.
Specifically and importantly, it offers long term voyage and time charters to its customers through customized freight structures, which helps them to gain control on their costs and manage the supply chain effectively.
These unique competences give Tata NYK the requisite wherewithal to be the leading and the chosen player by the marquee Indian & Global corporates for their oceanic transportation requirements.
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