Top Japan shipper sees orders recovering as trade tensions ease

Japanese shipping giant Nippon Yusen is confident U.S. tariffs won't hurt its business as much as initially expected, with bookings already recovering and set to stay strong over the next three months.
The biggest shipper by market capitalization — which operates container and cruise lines, specialized carriers, and air freight — saw a robust recovery in container shipping orders following an easing in tensions between the United States and some of its trading partners this month, said Chief Executive Officer Takaya Soga. That's after booking volumes had slumped by a third as U.S. President Donald Trump announced sweeping tariffs in April.
"Even if things continue as they are now, there will probably not be another decline in bookings from tariffs this year,' he said on Wednesday.
Specifically with regard to shipping autos, which have faced a 25% U.S. tariff since April 3, Soga said bookings "have not dropped at all.'
Separately, rival Mitsui OSK Lines also said an expected decline in shipping volume had not materialized as of April and May. "In a sense, it is a happy miscalculation,' Chief Executive Officer Takeshi Hashimoto said earlier this week.
A good order book would help Nippon Yusen focus on quickly expanding its shipping business through mergers and acquisitions, Soga said.
Nippon Yusen became the world's largest operator of liquefied petroleum gas (LPG) carriers last month after it acquired the non-crude oil tanker shipping business from Eneos Ocean, a subsidiary of Eneos Holdings, for ¥76 billion ($526 million). The company took over over 47 vessels, including LPG carriers and chemical tankers.
Soga said acquiring part of Eneos Ocean "was a very good deal, and I'm currently looking into other similar opportunities.' He declined to name any potential targets.
When asked about the U.S.' planned port-entry fee targeting Chinese vessels, Soga said he sees the policy having limited impact on Nippon Yusen as only 8% of its fleet is China-built. He added his company has no plans to exclude Chinese shipyards from future shipbuilding orders. Earlier this week, Mitsui OSK said it is hard to buy Chinese vessels for the time being as the U.S. ramps up scrutiny.

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Workers select freshly-picked avocados at a packing warehouse, in Periban, Mexico. According to Japanese customs data, the amount of avocados imported nationwide grew to nearly 80,000 tons in 2020, from around 3,400 tons in 1988, with the vast majority coming from Mexico. | Reuters For example, most of the imported avocados currently on the market are of the oval-shaped Haas variety, which is too susceptible to the cold for Japan's climate. Of the 600 known varieties of avocados, about 20 have been brought to Japan as genetic resources and can be legally grown here, Matsumoto says, noting that farmers in each region need to pick the variety that is best suited for the local climate. The biggest challenge is to find ways for the plants to survive the coldest days of the year. Even as the climate warms, Japan is still susceptible to the occasional cold snap in the winter. 'If you experience just one day recording minus 6 degrees Celsius, the entire crop could be ruined,' Matsumoto says. Mikan farmers switching to avocados will also face a financial risk, says Toshihiko Sugiura, who has studied adaptation strategies at the National Agriculture and Food Research Organization. 'It normally takes about five or six years before the first avocado harvest, which means the farmers will lose means of income during the transition.' Matsumoto says that, since Shizuoka farmers are already producing a wide variety of crops, they should try to maintain diversity and explore sustainable ways to farm. Shizuoka's proximity to Tokyo works to their advantage, too, he says. 'Beyond selling just avocados, Shizuoka should try to market avocado farming and build deeper relationships with consumers, inviting people to come to the prefecture to grow them together and developing green tourism or new food products,' he says. Mikan crisis Meanwhile, mikan, which boasts the largest cultivation area among Japan's fruit crops, is increasingly challenged by the warming climate. Mikan flowers today bloom earlier than before, but it takes more time for the fruit to mature, as carotenoid pigments, which produce its signature color, do not accumulate until temperatures drop, says Sugiura. Because of this, the fruit's peel tends to age, which causes the pith (the white layer inside citrus fruits) to separate more easily from the peel. Essentially, this means the harvested fruit can get easily damaged during transportation, hurting the farmers' bottom lines, Sugiura says. Mikan (mandarin oranges) are sorted at a facility in Uwajima, Ehime Prefecture. Traditional growing areas for the popular fruit are under threat as Japan's climate warms. | Jiji Unlike rice, which can be grown nationwide, fruit trees have lower climate adaptability, and their production areas tend to be region-specific — for mikan, that means production is best in warm southwestern regions of the country. As warming accelerates, current production areas may become unsuitable for farming, Sugiura says. Mikan is particularly sensitive to temperature, and its optimal average annual temperature range is narrow — between 15 C and 18 C. 'You may think that a temperature difference of 1 C may not mean much,' Sugiura says. 'But for mikan, it makes a world of difference.' Apples, optimally grown in regions with an average annual temperature between 6 C and 14 C, are another crop that is being severely impacted by climate change. In March, Sugiura's team released projections for areas suitable for mikan and avocado production, concluding that the optimal areas for avocados will increase by up to 3.7 times by the middle of the century and by up to 7.7 times by the end of the century. Avocados are fully integrated in the Japanese diet, from sushi to salads to sandwiches, and are easily found at supermarkets nationwide. | Getty Images The report also says the future of mikan production in Japan largely depends on which climate change scenario the world will tread. If warming is held to an increase of 1.4 C by 2100 compared with pre-industrial levels, a low emissions scenario that some leading scientists say is already impossible, 80% of the current production area will be maintained. On the other hand, if warming progresses in line with a high emissions scenario and reaches 4.3 degrees by 2100, none of the current mikan production areas will survive, according to the projection. Community revitalization Uchida, for his part, sees avocados as a tool to encourage more people to move to his hometown of Miho, a small community with a population of 8,000. He has found some varieties grow better than others and is pinning his hopes on Mexicola. This variety is resilient to cold and also matures earlier in the year, he says, believing the variety may give farmers a competitive edge over other avocado growers in Japan. When he started, Uchida was advised by other farmers to grow tomatoes and edamame, which are both dominant local crops. But Uchida was not interested in replicating what others were doing, choosing the less traveled path of avocado farming. A forum on avocado farming held last month in Shizuoka Prefecture attracted 120 participants and many were enthusiastic about the potential for avocado crops. | Tomoko Otake Uchida is also testing other tropical plants such as vanilla, passion fruit and sugarcane, acquiring know-how from horticulture magazines, social media and through trial and error. 'Some young people told me they are interested in farming but they can't see a future where they can make a living,' Uchida says. 'So I thought, 'Why don't we find things we can actually make a living from?'' 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