Ocean Cargo: Shortages of Containers Reaches “Crucial” Levels

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

By ·

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]

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!

Article Topics

Ocean Freight · Shipping · All Topics
Latest Whitepaper
Outsourced Transportation Management
All the benefits of owning a fleet without the headache of managing it.
Download Today!
From the August 2017 Logistics Management Magazine Issue
Which carriers, third-party logistics providers, and North American ports have crossed the service excellence finish line ahead of their competitors? Our readers have cast their votes, and now it’s time to introduce this year’s winners of the coveted Quest for Quality Awards.
BMW Takes the Inland Road to Efficiency
Global Logistics: No Shortcuts to Security
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
Getting the most out of your 3PL relationship
Join Evan Armstrong, president of Armstrong & Associates, as he explains how creating a balanced portfolio of "Top 50" global and domestic partners can maximize efficiency and mitigate risk.
Register Today!
EDITORS' PICKS
34th Annual Quest for Quality Awards: Winners Revealed
Which carriers, third-party logistics providers, and North American ports have crossed the service...
2017 Top 50 3PLs: Investment and Consolidation Maintain Traction
The trend set over the past few years for mergers and acquisitions has hardly subsided, and a fresh...

2017 Salary Survey: Fresh Voices Express Optimism
Our “33rd Annual Salary Survey” reflects more diversity entering the logistics management...
LM Exclusive: Major Modes Join E-commerce Mix
While last mile carriers receive much of the attention, the traditional modal heavyweights are in...