Slow Steaming Compounding Equipment Shortage
Monday, 14th June 2010
Most carriers are still operating a slow steaming policy for the majority of their fleet. This policy by the shipping lines means there are many more shipping containers on the sea and for longer periods than usual.
With so few containers built in 2009 and the factories still not running at full capacity there is no immediate end to the box shortage in sight. Peak season is fast approaching and 2 of the leading lines are apparently toying with the idea of introducing a repositioning surcharge to the shippers in order to get their equipment back to China and the Far East where it is most needed.
The leasing companies too have been quick to capitalise on the shortage. Not only have rates increased but lease terms on any new deals exclude drop offs anywhere other than the Far East. The lines are in no position to shop around as many leasing companies utilisations are running in the high nineties.
Used shipping containers for sale are also in short supply both in London and Essex with many people now opting for self storage as an alternative while they wait for prices to come down and stock levels to increase.
We have also seen a marked increase in the number of people requesting 40ft containers to be converted into 2 x 20ft or 4 x 10ft containers due to stock shortages and high prices. This type of modification was at times rare due to the availability of cheap boxes. With so few on the ground and prices at near record levels conversions are a realistic option.
Those new containers that are being built are mainly being ordered by the leasing companies and going out on 5 to 7 year leases straight from factory. One or two shipping lines have begun to place orders but the majority still have financial constraints and new tonnage to pay for.