Things change quickly in the
shipping industry, as 2008 has certainly demonstrated. Soaring
asset prices, rising shipping capacities and crashing consumer
demand have crippled freight rates worldwide, and have all but
killed the profitability of Asia-Europe lines. But could this be an
environment in which container lessors can thrive?
2008 has been “a very good year” for
the shipping container leasing industry in the eyes of Textainer
Group, CEO John A. Maccarone, who made the comment to maritime
industry journal Lloyd’s List at the Informa Intermodal
2008 conference in Hamburg last month.
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Maccarone bases this on the fact that
between 45 and 50 percent of all new shipping containers are
supplied by leasing companies, in contrast to the low of 35 percent
seen in 2006, when shipping companies were wealthier and could
purchase more units outright.
Since the onset of the financial
crisis, however, low cargo volume growth and declining rates have
seen shipping lines turn to leasing again, he said. Whereas
Maccarone was optimistic that such trends would continue, and that
2009 would be prosperous, others are more cautious.
Mark Venables, sales director at UK
container lessor Amficon, agreed that there have been “good
utilisation levels for leasing companies” in 2008, but stated that:
“In view of the global economic slowdown, it is still too early to
predict what the overall demand will be for leased containers
during 2009.”
Although he agreed that a larger
proportion of new containers were being leased in 2008, he noted
that competition between lessors was as intense as ever.
Leasing Life reported the entry of transport lessor Axis
Intermodal into the world of container leasing in October, and both
Lotus Leasing and Beacon Leasing have also entered the market in
2008. The industry they have entered is one that could go any way
next year.
Venables is clear, though, that
leasing will continue to be of benefit to carriers.
He said: “With further freight rate
decreases anticipated during 2009, this will have an impact on the
buying power of the shipping lines.
“Consequently, as and when shortages
do arise, we are anticipating that shipping lines will prefer to
lease equipment during 2009 instead of purchasing new-build
containers.”
One prediction from Amficon for 2009
is for an increase in leasing of in-service containers.
“Based on current manufacturing costs
of containers in China, and the dramatic reduction in the
anticipated number of new-build containers over the coming months,
we are expecting shipping lines will be more inclined to hire
in-service equipment during 2009, which should maintain utilisation
levels for leasing companies during next year,” Venables said.
Luckily for lessors, container RVs are
remaining fairly static, because of the robust nature of the asset
and the fact that many factories, finding little demand for goods
at such high prices (new-built containers rose in price by around
40 percent in the year leading up to Q308), have more or less shut
down until the Chinese New Year.
Despite these advantages, major
potential problems lie ahead.
With container prices high, demand for
shipped goods dropping and shipping capacity set to continue rising
by up to 12 percent next year, freight rates will continue to dent
the profits of smaller operators on Asia-Europe routes.
“Shipping line profitability will
therefore be affected,” said Venables, “with a worst-case scenario
of certain ‘financially weaker’ shipping lines going out of
business.”
