Subscribe to our free, weekly email newsletter!


Ocean Cargo: Shortages of Containers Reaches “Crucial” Levels

By Patrick Burnson, Executive Editor
June 22, 2010

The shortage of containers has reached critical levels, with lines blaming the shortage on “exceptional” high demand which developed since the Chinese New Year in February, noted analysts for Alphaliner.

According to the Paris-based container shipping consultancy, prices for new containers have soared to their highest levels in almost 20 years as both carriers and container leasing companies rush to place fresh orders to meet the new demand.

“The current price for 20-foot dry containers has reached $2,750/unit compared to less than $2,000/unit at the end of last year,” said an analyst in the report.

Even at these higher prices, demand will still outstrip supply for the current peak season. Container manufacturers are facing difficulties in restoring full capacity following the halt in production of dry containers since October 2008, the report stated.

Total capacity at the main container producers have been cut back significantly since late 2008, as production lines were shut and twin-shift operations re-duced to single shifts.

Although annual production capacity at the two largest container manufacturers, CIMC and Singamas, is over 3.5 million twenty-foot equivalent units (TEUs), these two sup- pliers are expected to produce only 1.35 million TEUs this year. The global output of new containers is estimated at 1.5-2.0 million TEUS for the full year, well down from the peak of 4.2 million TEUs produced in 2007 and a global capacity of 5 million boxes.

Meanwhile, demand has picked up significantly since the beginning of the year. CIMC is reporting sales of 102,900 TEU of dry van containers in the first quarter alone, compared to 60,400 TEU in the whole of 2009.

 

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

As the calendar turns to September and we approach 2015’s final third, there are, as usual, many things that require our attention from a freight transportation, logistics, and supply chain perspective.

According to Panjiva data, July shipments-at 952,126-were up 1 percent over June, following sequential gains of 7 percent for May over April and 1 percent for June over May.

While the previous edition of the Shippers Conditions Index (SCI) from freight transportation consultancy FTR showed some encouraging signs for shippers in terms of a mild uptick in overall market conditions.

Supply Chain Expert John Caltagirone is working with an increasing number of large companies that need help addressing key issues that “keep them up at night.” Here’s what Caltagirone recommends supply chain managers do right now to prepare for the future.

What will it take to find, train, and retain talent going forward? Three supply chain experts dust off their crystal balls and discuss the top ways to build the workforce for 2025.

Article Topics

News · Ocean Freight · Shipping · All topics

Comments

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


© Copyright 2015 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA