Container lessors and shipping carriers ordered a record number of containers in 2021 as congestion in global supply chains kept equipment tied up longer, according to a new report from Drewry.
Drewry says this order has contributed to a container glut in the global equipment pool, but the glut should be manageable by the industry.
In 2021, the global shipping container pool grew 13% to nearly 50 million TEUs, three times the previous growth trend, as lessors and carriers ordered a record number of boxes while withdrawing fewer of aging units, according to Drewry. 2022/23 Container Census and Leasing Annual Review and Forecast report. But with supply chain congestion, containers were about 15-20% less productive than before Covid-19.
Drewry estimates that each container averaged 18.1 lifts in 2021 compared to 19.2 in 2020 and between 19.5 and 20.6 in the 2010s. In addition, the number of containers per vessel capacity slot has increased 8% in 2020 at the start of the pandemic and remained at this level throughout 2021.
Drewry further estimates that there is now a container surplus of up to 6 million TEUs, but although large by historical standards, Drewry considers the excess to be manageable with new regulations on IMO emissions and few orders in the coming years.
“The delivery schedule for new vessels is very strong with slot capacity expected to increase by 3.6 mteu in 2023 and over 3.9 mteu in 2024,” said John Fossey, equipment research manager containers at Drewry. “With new IMO emissions regulations coming into force in January 2023 requiring some ships to sail more slowly, much of the surplus equipment currently in service is expected to be absorbed. Additionally, there is evidence to suggest that some carriers plan to have more buffer stock in their equipment pools, while fewer new containers are built over the next two years.
Drewry expects production in 2022 and 2023 to be much lower than last year, at 3.9 million TEUs and 2.4 million TEUs, respectively, with replacement accounting for most orders.
While new-build and used prices will decline, a return to the very low prices of 2019 is not expected as manufacturers must manage their capacity and pricing strategies very carefully, Drewry said. Meanwhile, the secondary market also remains robust and there are also growing uses for ex-trading containers.
“Looking forward, shipping carriers will be the main purchasers of equipment over the next two years, with lessors then regaining control, increasing their share of the pool to 54% by 2026,” Fossey added. “In addition, daily rates and returns on investment will generally be higher over the forecast period than over the past five years.”
Somewhat related, Drewry said in June that shipping’s use of ‘smart’ containers is set to explode by 800% over the next five years as operators and cargo owners look to increase cargo visibility. amid disrupted supply chains and congestion.