Cargo movement from Asia to North America and Europe usually starts from July in earnest and peaks in Sep and then goes down.Shipping lines have been introducing Peak Season Surcharge from July in North America and Europe/Mediterranean to improve the freight rates which has been encouraging them by favorable cargo increase in Europe/Mediterranean routes as well as North America routes.
The Shipping Guide (published by Ocean Commerce) as one of the leading shipping trade papers was scooping on Jun 15 that import of North America in 2010 will be expected 2 digits growth against the same month of the previous year till the coming October which has been reported in the Global Port Tracker prepared every month by Notional Retail Federation (NRF) and Hacket Associates.
There are some shipping lines who have aggressively introducing 10,000 TEU ships in Europe trade such as Hanjin Shipping with the first ship of 5 x 10,000 TEU class in Jul’10 and CMA,CGM with 3rd ship of 12 x 11,400 TEU in Jul’10.
Leasing companies have no stock of containers in any place else at the unprecedented highest utilization of over 98% in their history. Therefore, if there is any return of containers in North America and Europe leasing companies simply ask shipping lines who need containers badly on condition of returning all in Asia. In case supplying ex Asia shipping lines seem to have been required pick-up charge, 6 months or one year of minimum days as well as on round trip back to Asia. In addition, leasing companies try not to lease shipping lines whose rate are comparatively low and to force shipping lines to return containers of the lower rate contacts. At the same time they have been successful in revising master lease contract with shipping lines under the tightest container situation. Therefore, leasing companies have been doing life extension of old containers by minor repairing especially for wear portion which used to put on sale. As a result, each leasing companies are expecting this year to be historically the highest in profit.
Even if leasing companies are said to be over 98% in utilization most of them could not fully secure the production lines. Some of them have been shifting their acquisition from Dry containers to 40f Hi-cube Reefers which have been successfully leased to shipping lines under long terms.
Chinese container makers seem to have been hesitating to expand their production capacity due to various reasons. Container price is $2,850 per 20f with Aug delivery which is the highest in the history. There has been no report of big production delay up to now. However, container makers are afraid of delaying the parts from the part makers who could not cope with favorable demands of containers so that container makers have started with leasing companies to urge them to allow the alternatives in order to avoid any delay of production. Leasing companies are nothing but accepting their offer because most of their order of containers have been committed by long terms with shipping lines and leasing companies are just worry about unnecessary dispute with shipping lines in production delay. Container quality seems to be very similar to wine produce which is subject to the weather condition and which is unpredictable. Chinese container makers are inclined to make containers for their convenience such as chasing the mass of production or establishing the new factory for welcoming more order of containers. Therefore, it is regrettable to say that the container quality of this year may be questionable.