Lessors own growing share of container fleet

Drewry says leasing companies are expected to own 54 percent of the world’s shipping container fleet by 2020.    A growing share of the world’s shipping container fleet is owned by container leasing companies instead of liner companies, says Drewry. It said leasing companies now own nearly 52 percent of the fleet and that share is expected to grow to 54 percent by 2020.
  “Leasing companies accounted for 55 percent of container purchases in 2017, which continues a trend seen for most of this decade,” the London-based consultant said.
   Lessors increased the size of their fleets 6.7 percent last year, while transport companies grew their fleets more slowly — 2.4 percent in 2017.
    In a press release accompanying the latest issue of its Container Census & Leasing and Equipment Insight report, Drewry said container manufacturers made 55 percent more containers in 2017, with dry container manufacturing recovering from a 2016 slump.
     Drewry said the world’s largest shipping container manufacturer, China International Marine Containers (Group) Ltd. (CIMC) built 88 percent more boxes in 2017 than the prior year and even it was outpaced by some smaller container builders such as Dong Fang, which made 143 percent more, and Maersk Container, which made 118 percent more.
    The average age of the world container fleet remained above 6.5 years for the second year in a row.
    Drewry said the price of new containers rose quickly as demand returned last year and has been largely stable ever since. It noted some of the price increase was attributable to rising steel prices and that an escalation in trade dispute between the United States and China could push prices for new containers higher.
   CAI International, one of the leading container lessors, said last week in an investor presentation that container prices remain stable at about $2,180 for a 20-foot, standard dry container.
    “Geopolitical issues notwithstanding, we do not expect any significant change in newbuild prices over the next couple of years,” said Martin Dixon, the head of research products for Drewry. He said used container prices have been rising steadily, but that their future trajectory is harder to predict.
   CAI said that in the first quarter of 2018 it saw continued strength in the container leasing market: Average utilization for CAI’s owned container fleet during the first quarter of 2018 was 99.2 percent compared to 95.7 percent for the first quarter of 2017, and 99 percent for the fourth quarter of 2017.
     CAI reported lease-related revenue for the first quarter of 2018 was $73.7 million, an increase of 21 percent compared to the first quarter of 2017.
    Profit attributable to CAI common stockholders in the first quarter of 2018 was $17.1 million compared with $5.3 million in the first quarter of 2017.
   Victor Garcia, president and chief executive officer of CAI, said the company has already invested, or committed to invest, $336 million in new container-related equipment during the quarter. He said about 80 percent of the equipment on order has committed leases, most of which will go into service in the second quarter.
   He noted CAI raised $38.7 million through the sale of 1.6 million shares of perpetual preferred stock, which will help finance expansion of the company’s fleet.
   “We expect that the utilization of our fleet will remain at a high level this year and that new investment will remain strong due to ongoing global economic growth. Lease rates have stabilized and remain at attractive return levels,” said Garcia.