Ocean Cargo: Shortages of Containers Reaches “Crucial” Levels

Analysts contend that box manufacturing slump is hurting both carriers and shippers

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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

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 [email protected]

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