ORIX Corporation's shipping business has evolved from modest beginnings in domestic vessel leasing to become a diversified maritime business, establishing a unique position in a highly volatile industry and developing the strength to navigate cycles and change.
The journey, spanning more than five decades, is the result of a consistently executed strategic approach combining balance sheet businesses with fee-based businesses that generate service income —-- building a business model that withstands the severe volatility of shipping markets while enabling long-term growth.
ORIX entered the shipping sector in the late 1960s with domestic second-hand vessel leasing, expanding into ship finance for overseas shipowners in the early 1970s. The establishment of Perses Shipping (now ORIX Maritime) in 1977, a 100% subsidiary of ORIX Corporation, marked the company's commitment to ship owning as a core business. ORIX Maritime mainly owned a fleet of bulk carriers and outsourced vessel management to third-party operators, while retaining ownership and responsibility for vessel operations.
The company's shipping portfolio has expanded significantly through strategic M&A. In February 2024, ORIX acquired Santoku Senpaku, bringing a diverse fleet spanning bulk carriers, car carriers, and container vessels. Unlike ORIX Maritime, Santoku Senpaku manages vessels in-house. It also works in collaboration with manning companies to train crew members, thereby establishing a framework that further enhances safe vessel operations.
More recently, in March 2025, ORIX acquired SOMEC, formerly Sojitz Ship Co., a company focused on ship brokerage and asset management and operates a fee-based business. This complements ORIX’s balance sheet businesses and enhances the stability of its revenue structure.
"Our shipping business encompasses a broad range of maritime services. We own and manage vessels, train crew members, provide financing, and engage in brokerage activities. This diversification is not accidental, but a strategy to create value under all market conditions.” explains Koji Tsutsui, General Manager, Ship and Marine Project Group
Financing, owning, trading
Akio Fujiwara, Deputy General Manager of the Ship and Marine Project Group (right)
ORIX categorizes its shipping activities into two fundamental types: balance sheet businesses and fee-based businesses. Balance sheet businesses include ship finance, where loans are provided with vessels as collateral, and ship owning, where the company assumes both asset and operational risks. These businesses offer returns on invested capital and potential gains on sale, while also being exposed to market fluctuations and residual value risks.
Fee-earning businesses, by contrast, generate revenue through services without owning assets. These include the arrangement of operating leases, ship management, and brokerage activities such as vessel trading.
"The fee-based businesses can grow with relatively low capital requirements and generate stable cash flows even during market downturns.," notes Akio Fujiwara, Deputy General Manager of the Ship and Marine Project Group. “This is extremely important for maintaining business flexibility. Asset management is also a key focus area for the ORIX Group and will continue to be actively expanded.”
This diversification goes beyond mere revenue stabilization. The shipping industry is notoriously cyclical, with freight rates and vessel values swinging dramatically based on global trade patterns, fleet supply, and economic conditions. ORIX's model allows the company to adapt its strategy to market phases.
During downturns, when asset prices fall and competitors retreat, ORIX deploys cash to place large vessel orders or acquire distressed loan portfolios. Between 2014 and 2017, for example, the company ordered 21 vessels and acquired a shipping loan from Royal Bank of Scotland, capitalizing on depressed valuations.
During boom periods, meanwhile, ORIX focuses on placing vessel orders backed by long-term charter contracts to mitigate residual value risk while placing greater emphasis on fee-based businesses that are less affected by market fluctuations. Supported by its unique and diversified business portfolio, ORIX has maintained strong competitiveness through agility, even against larger multinational shipping companies that enjoy economies of scale but are often not as nimble.
ORIX also provides operating lease services in the shipping sector, similar to its aviation business, supporting its competitive advantages in both domestic and international markets.
Training, decarbonizing, digitalizing
Looking ahead, ORIX faces both significant opportunities and challenges. The Japanese government's policies aimed at strengthening the competitiveness of the shipbuilding industry aims to restore the country's position in global maritime manufacturing, potentially creating opportunities for increased domestic vessel orders. ORIX is helping to foster innovative, cross-industry collaboration, taking part -- via its SOMEC subsidiary -- in establishing Sakura Ocean Corporation with SHOEI KISEN, KAMBARA KISEN, and Onomichi Dockyard.
Meanwhile, talent shortages across the maritime sector, ranging from seafarers to shore-based technical staff, pose structural challenges for the industry. Santoku Senpaku has found a partial solution to this by promoting foreign staff with seafaring experience to management positions and encouraging them to settle in Japan.
Decarbonization represents perhaps the most significant transformation facing the industry. ORIX has responded proactively, launching sustainability-linked loans in 2022 that tie financing terms to environmental performance metrics. In 2024, Santoku Senpaku ordered a methanol dual-fuel bulk carrier, and in 2025 began managing LNG dual-fuel car carriers.
Digitalization and artificial intelligence are also reshaping maritime operations. ORIX aims to invest in AI applications for predictive maintenance, fuel optimization, and navigational safety.
“The shipping business will always be volatile, but the companies that survive and thrive are those that can adapt,” Tsutsui observes.
As global trade patterns evolve and environmental pressures intensify, ORIX's shipping business model demonstrates flexibility and sustainable competitiveness.
