Monday, April 14, 2014

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Drewry: Box prices rise in early 2014, offsetting 2013 losses

Prices for new dry freight containers rose in the first quarter of 2014 for the first time in two years, according to Drewry's latest issue of Container Equipment Insight.

Drewry stated that standard box prices fell steadily last year, declining by late 2013 to the lowest price since 2009. They said that as of April 2014, container prices have "barely" managed to recover almost 10 percent with the current cost essentially the same as it was in April 2013.

"It is too early to say whether the equipment pricing trend has truly reversed, as the box equipment market remains volatile," said Andrew Foxcroft, a consultant with Drewry Maritime Research.

Last year's lack of any real peak season in the summer months pushed down dry freight container production for another year, the publication said, with the annual total for 2013 falling short of 2012 numbers, and well short of 2011.

The outlook for container manufacturers in 2014, according to the quarterly publication, won't be much different than last year, and so remains relatively depressed.

Drewry concludes that the global container equipment fleet growth is again forecast to fall short of 5 percent for 2014, with the box lease industry almost sure to account for most of the expansion and container carriers ordering a minority share of new containers.

Dry freight and reefer lease rates will probably remain under pressure in 2014, the researchers said, with little chance of any recovery in the initial cash returns generated from new equipment rental. Just as new pricing is expected to stay down and unstable, rental per diems also will continue to struggle to stay at their current rate.



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