The account settlement of the first quarter (April ~ Jun) of fiscal year, 2010 for Liner business of 3 Japanese shipping lines has been published as follows:
| vs Apr/Jun | Recurring | vs Apr/Jun | ||
| Sales | 2009 | Profit | 2009 | |
| NYK | $ 1,448 M | + $ 293 M | $ 121 M | + $ 340 M |
| MOL | $ 1,722 M | + $ 500 M | $ 100 M | + $ 336 M |
| Kline | $ 1,321 M | + $ 307 M | $ 105 M | + $ 340 M |
US$1.00=\85, M=million
The cost reduction policies such as Freight recovery (including improving profit in north/south trade), increasing loading cargo, ESS (Extra Slow Steaming), reducing the operating ships etc have contributed them to go into the black. They greatly expect increased revenue/profit through the fiscal year 2010 while there are some un-transparency existed. The Liner business share in K Line is the highest (over 40% ) among 3 Lines but K Line has been expediting diversification in their business in their earlier stage. The strong point for 3 Japanese Lines is that they are all round players such as Bulk, Tanker, Car Carrier etc. they would be the last survivors under any situations. As a result, they have been recovered earlier than other shipping lines after Lehman Shock. In addition they are good perdiem payers within 30 days after invoice date and all L/Ts paid in one month advance. Therefore, most leasing companies used to prefer doing business with 3 Japanese Lines by all means.
In the meantime, 3 Japanese Lines have been quite fastidious in container quality as they have an own specification called as famous “Japanese Lines’ Spec”. The account settlement of the first quarter (April ~ Jun) of fiscal year, 2010 for Liner business of 3 Japanese shipping lines has been published as follows:
| c) | d) | |||
| Company | Number of Fleet |
2010-1H | 2010 forcast | Number of Fleet |
| Mid 2010 | Order | Grand Total | End 2010 | |
| 1) TEX | 2,215 | 70 | 133 | 2,245 |
| 2) FLO | 1,610 | 50 | 95 | 1,632 |
| 3) TRI | 1,580 | 350 | 286 | 1,644 |
| 4) TAL | 1,100 | 100 | 190 | 1,143 |
| 5) GES | 900 | 40 | 76 | 917 |
| 6) CAI | 780 | 25 | 48 | 791 |
| 7) CRO | 635 | 15 | 29 | 641 |
| 8) GOLD | 500 | – | – | 500 |
| 9) SeaCube | 420 | 15 | 29 | 426 |
| 10) Dong Fang | 360 | 30 | 57 | 373 |
| 11) UES | 240 | – | – | 240 |
| 12) Beacon | 240 | 90 | 171 | 279 |
| 13) Other | 760 | 45 | 86 | 779 |
| Total | 11,340 | 630 | 1,200 | 11,610 |
| Remark: a) according to Lloyd’s List dated July 15, 2010 b) teu per 1,000 c) 1.2 million teu as foracasted 2010 new production order each leasing compay’s order subject to our forcast. d) each leasing company’s fleet size is our foracast based on forcasted total quantity of End 2010 |
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Lloyd’s List expects 2010 total new production order to be 2 million teu whch consists of 1.2 million teu of leasing companies and 0.8 million teu by shipping lines which is equal to 60% from leasing companies and 40% from shipping lines while 550,000 teu will be retired from shipping lines and leasing companies in 2010.As a result, total worldwide fleet would be 27.74 Million teu as of the end of 2010.Excepting this year if 10% of the world on-use containers would be retired every year it would be quite promising to 2nd hand dealers. After stabilization of operating fleet in shipping lines they would not hesitate to retire old containers. The number of retired containers from shipping lines would be dramatically increased in 2nd hand market to replace with their new production and repercussion of abnormal year of 2010.
At present container makers don’t seem to quote the leasing companies the new production price until one month before. However, some leasing companies who would like to secure the number of new production by all means have been promptly committing the line of production before indicating the new production price from makers. However, it is said that the production price would be in down trend after 4th quarter of 2010. So it is forecasted that shipping lines would start ordering new production earlier than expected.
The Nikkei Newspaper, one of Japanese leading Business Newspaper reports that the plant investment to overseas of fiscal year of 2010 made by all Japanese industries would increase by 35.1% to US$ 32.52 Billion ($1.00=\85). Therefore, overseas local production during April to June, 2010 have been made great progress by contribution of developing countries to the listed companies in having brought 5 times as large as profit of the same period last year. Overseas governmental funds which lost the way are trying to buy Yen and Japanese bonds which have caused Yen in high side. This definitely assures demand of 2nd hand containers ex Japan and moreover higher Yen is the favorable news to 2nd hand dealers and the end users in Japan.
There are not many 2nd hand containers in the market these days. There are some situations seen as 2nd hand dealers compete each other unnecessarily to raise the buying price up in bidding of shipping lines and leasing companies. As the worst case some 2nd hand dealers try to buy indiscriminately as speculation without considering quality of container. Thus, we should stop buying 2nd hand containers from speculating 2nd hand dealers. In addition, we should avoid buying abnormally old containers (over 15 years old?) when we will buy from shipping lines and leasing companies. If you want to buy such old containers you had better check container physically and judge by yourself to buy or not. Judging from the life of container (made in steel) it is hardly believed that steel boxes could stand for rough handling in international trade (Cargo Worthy Condition) without any problem after 15 years. They look worn-out with many patchwork and used by running repairs. The 2nd hand dealer should stay away from unknown quality of containers. Container aging is one of good judgment tools for decision of purchase. The 2nd hand dealer should be confident in quality of old containers which we deal with and we should sell them with pride. At least we should know who is the original owner, how old they are, its appearance, damage condition and then try to sell old containers based on understanding of containers condition on sale to some extent. Otherwise, in order to get 2nd hand business to be grown in the future as a part of container industry the position of the 2nd dealers would be in danger if we stay in irresponsible attitude of supplying with the container in poor quality and without care.