Container production doesn?t stack up

Container production doesnÆt stack up    Demand for shipping containers will outstrip supply in the peak shipping season this year, as manufacturers are unable to keep pace with demand for new equipment, information service Alphaliner predicts.
   Writing in the most recent issue of its weekly newsletter, Alphaliner said it expects global production of containers this year to be 1.5 million to 2 million. That’s up from the 300,000 to 350,000 that is estimated to have been built last year, but far below production in prior years.
   John Maccarone, chief executive officer of Textainer, the world’s largest container leasing company, said container building averaged about 3 million per year from 2004 to 2008. About 1 million containers per year had been scrapped, so that the world fleet grew in size at about at about an 8 percent annual rate, after disposals, between 2004-2008, he said.
   Alphaliner estimates the world container fleet at about 27.25 million TEUs.
   Construction of new dry cargo boxes came to a virtual halt in the fourth quarter of 2008 and container manufacturers did not reopen until the last couple of months of 2009. Maccarone said there was some continued production of reefer boxes.
   He adds that retirement of old equipment accelerated during the downturn because demand was so low during the recession so that the world population of containers actually declined by about 4 percent in 2009.
   Container production is centered in China, with two companies — CIMC and Singamas controlling about 3.5 million TEUs of the world’s 5 million-TEU of capacity. Alphaliner predicts those two companies will only produce 1.35 million TEUs in 2010.
   Maccarone said he has seen some estimates that as many as 1.9 million TEUs might be built, but he said “the problem is they lost all their labor and it has taken them quite some time to ramp up again. Even at the moment they are not able to produce on a double shift basis,” he said. It may take until late this year or early 2011 until factories are producing at capacity again, he added.
   Strong demand for containers has boosted the cost of equipment.
   Alphaliner estimates the current price of containers has climbed to $2,750 for a 20-foot box compared to $2,000 at the end of 2009.
   Maccarone said that a rule of thumb is that a 40-foot dry container costs about 1.6 times what a 20-foot box costs and a high-cube container about 1.7 times what a 20-foot box costs.
   Maccarone said demand for containers has increased as ships have come out of layup.
   The shortage of containers has also be been magnified by super-slow steaming. Maccarone said lines tell him it takes 5 percent to 7 percent more containers to carry the same amount of cargo because of super-slow steaming.
   Carriers are much more efficient in their use of containers than they once were — Alphaliner said that where they would have three containers for every vessel slot, they now need only two, because equipment is turned around more quickly, especially on the main routes from Asia to Europe.
   Many carriers are also adding “special loaders” or “sweeper ships” to pick up empty containers and return them to Asia, where they are in great demand.
   According to Alphaliner, Maersk said it is deploying five ships to collect empties and bring them back to the Far East, and it said it has identified 10 from other carriers, that are on trips to the Far East and are likely being used primarily for empty container repositioning. ' Chris Dupin