Wednesday, August 8, 2012
Global container equipment fleet grew to over 31 million TEUs in 2011
The global container equipment fleet grew a better than expected 8.5 percent to 31.25 million TEUs 2011, bettering 7 percent growth the previous year, according to an industry research report.
Up to 70 percent of net additions to the container equipment fleet likely occurred in the first half of 2011 with newbuilds subsequently slowing down along with a "misreading of demand" apparently at the root of a slowdown in the final six months of the year "highlighting distinct uneven progress," according to Drewry Maritime Research's Container Census 2012 – Survey and Forecast of Global Container Units.
"Few buyers predicted an over-supply (900,000 TEUs at mid-2011, and over 500,000 TEUs end-2011) that was exacerbated by a weak peak season," the report said.
"Even so, utilization of the in-service fleet held at a very high level, topping 95 percent," the report said.
Container-to-slot operating levels have dropped to historic lows, close to a ratio of 1.8:1 in 2010-11 compared to a 2:1 ratio for the period preceding 2009, the report said.
"This has been achieved by shipping companies working their assets harder, which considering the increasing container dwell times resulting from slow steaming, is something of an achievement," said Andrew Foxcroft, author of the Container Census report.
Foxcroft forecasts annual container fleet growth will be approximately 7 percent from 2012-2015 due to shipping company-wide adoption of a tighter container-slot operating ratio, with an increase in replacement purchase compared to 2010-2011.
Leasing companies have continued to dominate fleet TEU growth since, up 10.6 percent in 2011 and 9 percent in 2009, compared to shipping lines and related transportation companies increasing 7 percent and 5.7 percent, respectively. Investment in equipment by shipping lines in particular has dropped due to lower profits and higher debt, the report said.
Newbuild dry freight pricing continued to be volatile, hitting a high of close to $3,000 per-CEU (capital equipment unit) in early 2011 when replacement cost of the global fleet was up by over a third compared to the start of 2010, the report said.
CEU values increased throughout 2011 against little change in the fleet's replacement cost due to an overall 20 percent drop in dry freight pricing compared to "the continued static level of reefer, tank costs," the report said.
The dry freight price subsequently recovered by 20 percent during the first half of 2012 to $2,750 per CEU, before declining again, according to the report.
"The outlook is for pricing to stay high, with the annualized forecast holding at $2,500 for 2012 and 2013," said Foxcroft.
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