Subscribe to our free, weekly email newsletter!


Ocean Cargo: Containers and other equipment may be in short supply

According to the Container Census – Annual Survey and Forecast of Global Container Units, a new report from Drewry Maritime Research, shippers have another reason to be concerned
By Patrick Burnson, Executive Editor
July 18, 2011

After the critical shortages of containers of last year, production has picked up again, but high container prices and a tight ratio of containers to vessel slots will continue to constrain the availability of boxes.

According to the Container Census – Annual Survey and Forecast of Global Container Units, a new report from Drewry Maritime Research, shippers have another reason to be concerned.

At the end of 2010, the global fleet of containers exceeded $90 billion in replacement value for the first time, according to the report, also reflecting the increased unit prices of containers.??

?“If capacity is more tightly controlled by the container manufacturing sector than in the past, it will likely result in higher new container prices,” said Andrew Foxcroft an analyst who contributed to the report.

He said that the dominant Chinese container manufacturing industry was restricted to operating at half its maximum twin-shift potential throughout 2010, largely because of problems associated with restarting factory lines – and particularly rehiring labor – after more than a year of idleness. ??

“If capacity is more tightly controlled by the container manufacturing sector than in the past, it will likely result in higher new container prices,” Foxcroft said.

Material/production costs are also forecast to rise over the longer term, thereby providing a further inflationary stimulus.

?“It remains to be seen if continued high container prices will deter new investment, particularly from cash-strapped shipping lines who have found it harder to secure financing in recent years,” he added.??

Drewry expects that the availability of containers will be tight during the forthcoming peak season, but that problems of shortages of boxes will not be as acute and as widespread as in 2010.

Logistics Management was told that some of these fears may be exagerated, however.

“The freight rate trends do not suggest that anybody – neither carriers nor shippers – really believe that there will be container shortages or capacity constraints,” said Peter Freidmann, executive director of the Agriculture Transportation Coalition. “It appears that the demand for ocean transportation services is declining, and in fact there may not even be a peak season this year.”

For related articles click here.

About the Author

image
Patrick Burnson
Executive Editor

Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at .(JavaScript must be enabled to view this email address).


Subscribe to Logistics Management magazine

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your
entire logistics operation.
Start your FREE subscription today!

Recent Entries

Data issued by the National Retail Federation lowered its 2014 retail sales forecast, due to a slow first six months of the year (and largely negatively influenced by the terrible winter weather), but noted that retail sales are expected to be strong over the next five months to finish the year.

Anne Ferro, a ferocious advocate for greater truck safety and a constant thorn to truck drivers and some unsafe trucking fleets, says she is leaving as administrator of the Federal Motor Carrier Safety Administration. No successor has been immediately named.

Data issued by the National Retail Federation lowered its 2014 retail sales forecast, due to a slow first six months of the year (and largely negatively influenced by the terrible winter weather), but noted that retail sales are expected to be strong over the next five months to finish the year.

The saga continues, as the PMA and ILWU plan to resume their contract negotiations on Monday, August 4, in San Francisco

Carload volumes were up 7.6 percent at 299,256, topping the week ending January 12 at 290,607 and the week ending July 5 at 270,731.

Comments

Post a comment
Commenting is not available in this channel entry.


© Copyright 2013 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA