Introduction Origins

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  4. The Establishment of O.S.K. Lines, Ltd.

Introduction: Origins

O.S.K. Lines, Ltd. solidifies its position as a major Japanese shipper.

The birth of O.S.K. Lines, Ltd. in Osaka, the heartland of Japanese marine shipping, was the culmination of numerous events that took place after the Meiji Restoration.
That development, which expanded the nation’s domestic and international shipping routes, led to the establishment of Osaka Building Co., Ltd.

1. The Establishment of O.S.K. Lines, Ltd.

Osaka was originally the hub for Japanese shipping, as evidenced by the fact that the Kitamaebune shipping route connecting Hokkaido (formerly called Ezo) to the Sea of Japan originated at Osaka. Although commoners were allowed to own ships after the Meiji Restoration, it was mainly Western shipping companies that took control of shipping in Japan. Foreign trading companies that had expanded to Japan controlled both coastal routes and ocean routes, and steamers owned by those companies were used to transport cargo along the Seto Inland Sea and Kyushu routes. Naturally, the government could not just ignore this situation. They opened up the Osaka–Yokohama route using steamships purchased from abroad, but this route was mainly used for official purposes, and shipping in Japan, for all intents and purposes, was exclusively the domain of foreign trading companies.

  • Saihei Hirose

This situation changed with the outbreak of the Satsuma Rebellion in 1877. Supplies and troops needed for the war had to be transported to Kyushu, but the number of vessels was limited, so a growing number of companies entered the shipping business. However, this left an overabundance of vessels when the war ended, so competition between steamship companies intensified. In particular, competition for customers in the form of fare reductions grew more apparent.

The Osaka Shipping Company was formed in 1881 by parties that were concerned about the negative effects of this competition, and an agreement on shipping rates was established at that time. However, competition failed to subside following those developments, and shipping companies realized that corporate mergers were the only remaining option. As a result, a major shipping company was established. The man responsible for this transition was Masahatsu Nakahara, the president of the Alliance Shipping Company, the company that had taken over the business operations of the Osaka Shipping Company. Nakahara sought the cooperation of Saihei Hirose, the head of Sumitomo Zaibatsu. Hirose, who had devoted himself not only to the Sumitomo family but also to the development of the Kansai business community, accepted the proposal from a broad perspective and instructed his nephew Teigo Iba, who later would become the second head of Sumitomo, to assist with the establishment of the company.

Coordinating the complex interests involved was no easy task, but O.S.K. Lines (now called Mitsui O.S.K. Lines), which would play a central role in the establishment of Daibiru Corporation (hereinafter, “Daibiru”), began operating in May 1884 at 14 Tomijima-cho, Kita-ku, Osaka (its present-day address is 3-7-25 Kawaguchi, Nishi-ku, Osaka). The company was capitalized at 1.2 million yen and owned 93 ships. Hirose was appointed president.

Introduction: Origins

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