Factories Flooded With New Container Orders
Friday, 18th June 2010
In stark contrast to the hiatus in 2009 where next to no new shipping containers were built the latest figures from the world largest factory shows a 70% increase in the first quarter.
Prices are very high at the moment but with such a global shortage the lines and leasing companies have little choice. The leasing companies were the first to start ordering again, many are now running with utilisation at 98% and no available stock on the ground anywhere. Those new boxes they are building are being snapped up by the lines at much higher rates and for leases of up to 8 years.
The lines however are now themselves beginning to place orders with the factories. Encouraged by the rate increases they have negotiated and the latest batch of surcharges there is at last some spare capital to allocate on container manufacture.
How long it will take for these new containers to come on stream and the knock on effect is open to question. For the time being the factories in China are still not opening up extra capacity. Lines have begun to move production to Vietnam but quality issues remain at the back of many peoples minds. Once production does increase and the lines own stock levels increase some equipment will inevitably be off-hired and offered for sale. In what quantities, when and for what prices are questions many are second guessing.