‘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.”