In the 2nd quarter of 2010 almost all shipping lines seem to have newly started after managing many negative factors facing since Lehman Shock.Their future could be promising toward the end of the year by the improved freight rate caused under the pressure of ship space after stopping the number of operating ships, slowdown of ship speed etc. The headline of ” 8% of Increase in the number of containers for USA retail trade of April” in the Shipping Guide (Ocean Commerce) dated April 7 has been ensuring the improved market in Transpacific and it is looking like representing the coming good market.
The economic policy having been set forth by the President Obama would ensure the strong American dollar and encouraged American consumers restoring hopefully their strong buying power again. We can expect strong America to import more and to export more in the future. In the meantime, EU has somehow managed the economic crisis of Greek but there have still been a few troublesome tasks left like Spain, Ireland etc in their group. However, time could give a hint to solve them before serious problem because of EU history to be integrated as a union. After EU could find its clue of solution in the economic gap between the members of the union as well as USA the dynamic wave of cargo movement in the world could be expected. Each container leasing company could have been enjoying over 90% in the container utilization. Their depot inventory has been hitting the bottom so that they have been eager to place an order for new production but they could not place an order because of the production capacity limit. The container makers have been unwillingly to expand their capacity as before because they would like to avoid any container price competition besides predicting container price under the pressure of increasing steel price of 2~3 months later. Before Lehman shock they would accept any order by extending their production lines without problem. In the meantime, we have to consider that one year time lag of no production of Chinese makers would cause instability in container quality. As a result the leasing companies have been trying to lease new production under long terms lease by all means. All most shipping lines would hesitate to build own new production but try to depend on leasing instead under the current container price of $2,500 per d2 would be about $1,000 higher than the cheapest. Taking an advantage of the shipping line’s weakness the leasing company would try to keep the old new production made in 2009 later to make the best use of them in the hottest market in summer time. It would be no wonder that about half share of 200,000teu of new production as leasing company portion in the factories in 4th quarter of 2009 seem to have been temporarily disappeared till the coming strong market. It is the fact that shipping lines could not bring empty containers back to China and Asia from surplus places of N. America and Europe caused by less space of the reduced number of ships and lowdown in ship speed etc. Therefore, container shortage in China and Asia would be more sever in the future and it would force shipping lines to keep using their old container longer. It would also make less available of 2nd hand containers in the market which will automatically push 2nd hand container price in uptrend. It would be inevitable for the 2nd hand dealers to prepare for increasing price by persuading the end users to understand the coming market better I will continue to update you as necessary in the future. Best regards.