‘Critical’ shortage of containers

If you’re looking for
containers, it’s not going to
be an easy search, according
to Darren Singh, operations
director of SA container
conversion and supply major,
Container World.
“Currently container
supply is very difficult to
source both on the local and
international markets,” he
told FTW, “and this is likely
to carry on into the New Year
as well.”
And, if you do get
containers, he added, you
are going to have to pay a
premium price.
This goes back as far
as July this year, when
Container World MD
Christopher Lee told us
that the latest news on
the “critical” shortage of
containers was that the price
of new boxes had hit the
highest prices asked since
1991.
He added that the news was
that the price of a new 20-foot
(6-metre) dry cargo box had
increased from US$2 000 per
unit at the end of last year to
US$2 750. “And,” he added,
“in some cases – depending
on specifications – even
higher.”
At the same time, market
analysts expected demand
to outstrip supply during the
third quarter, which is a peak
season for seafreight in both
the northern and southern
hemispheres.
This was confirmed by a
major lessor of intermodal
containers, Bermuda-based
Textainer Group Holdings,
when it announced a third
quarter 137% net profit
increase. It “continues to
benefit from a worldwide
shortage of containers, the
lack of new production,
combined with continued
retirement of older
containers”, said a company
statement accompanying the
results.
The company also
agreed with Singh’s forecast
of an on-going shortage into
2011. It said that it estimated
that total new container
production would only be
approximately two million
TEUs for 2010 as it took
some time for container
manufacturers in China
to ramp up production to
more normalised levels after
closing plants last year.
Lee’s market analysis
came to the same
conclusion. If you looked at
the survey by French-based
Alphaliner you would see
that container manufacturers
were facing difficulties
in restoring full capacity
following the cutback in
production of dry containers
since October 2008.
“Capacity at the
main container
producers has been
cut back significantly
since late 2008, as
production lines
were shut and twinshift
operations
reduced to single
shifts,” he told FTW.
“Although annual
production at the two largest
container manufacturers,
CIMC and Singamas, is over
3.5-million TEUs, they are
expected to produce only
1.35-m TEUs this year.”
The Container World
reading is that total output
of new containers this year
is expected to reach between
1.5-m and 2-m – well down
on the 4.2-m produced in
2007, and the current fleet
of 5-m.
If you’re looking for
6-m and 12-m refrigerated
containers (reefers), they’re
like hens’ teeth, according to
Singh.
On the domestic leasing
market, meantime, he said
that demand was high.
And, in concluding his
market summary, Singh
said: “Tank business is
very lucrative – and there is
always a demand.
“New container prices are
stable but the ‘crystal ball’
is foggy and predictions for
the pricing in the New Year
are that they’re likely to
increase.”