Container market Report August 2011

The cicadas simultaneously start singing in August in Yokohama where I live. Their sound makes us feel hot summer hotter. The sound of the cicadas is the symbol of the summer. I could hear their sound at the early July in the small town in Nagasaki in Kyushu where I was born and raised. I used to be excited to hear the sound of the cicadas for the coming school vacation. The larva of the cicada lives underground for 3~17 years subject to the species and the imago ends their life on the ground for one month at the longest. The way of their life with the restless singing would look lament in their shot life. I used to feel the dispensation of the living creature in a childish mind.

Aug. 15 is the end of the World War II. This year is the 66th anniversary. The atomic bomb was dropped at Hiroshima on Aug.6 and 3 days later, Aug. 9 it was dropped at Nagasaki 66 years ago. It instantly took people’s life of over 200,000 and 100,000 in Hiroshima and Nagasaki respectively. I am in the generation of no experiencing the war but I could share the misery of the war to some extent in the summer, hearing the sound of the cicadas. It is the fact that Japanese are the first nation to experience the atomic bomb. The Bon Festival is in Aug. Each home decorates the Buddhist altar with the offering in order for their ancestors and the deceased to come back to home and to send them back to the world of the dead peacefully. Therefore, they clean their ancestors’ tomb. The most of the city persons come from the country try to come back to their home town in order to celebrate the Bon Festival with their parents, brothers and sisters. Therefore, the most of the enterprises used to close the office and the factories before and after Aug.15. All transportations have been congested with full of people for returning home. The traffic jams are seen in the main highways. It is very important for them to meet once a year with the separated family and friends. The feeling of the first baby boomers generation about the war seems to have been cultivated through the war story of their parents and relatives who had experienced the war and the communication of the local events (the Bon Festival dance etc).

According to my experience I heard that people experienced the war repeatedly reflected on their conduct and continuously said that the war was misery and should be not done again but there were surprisingly few people to express the feeling of the detestation and the deep-seated grudge. Thereafter, the generation who were raised on the slogan “overtake the West and pass it up” just thanks to the war experienced generation of their strong vital force, energy and prescience to have made Japan No.2 GDP of the Great Power. The first baby boomer generation who doesn’t know the war has a mission how to convey the legacy of the war experienced generation to the generation after us. Therefore, it is necessary for Japanese to go abroad to share the precious legacy of the war experienced generation with people in the world as one of the missions. We, Japanese could contribute to the world peace as being Japanese and because of Japanese in terms of the dignity of life, the value of the peace, living in harmony.

This strong yen is a good chance. It has been pushing our shoulder with the highest level of the strong yen such as $1.00=JPY76. It would be the loss to the world if we are introverted and withdraw from the people in the world. Let’s go overseas with our confidence. The people in the world are expecting us to do something better. Not only the individuals but the small enterprises! Never give up one or two times of failures! You could feel something better at the 3rd times of challenge.

Standard & Poor’s lowered the US’s sovereign long-term credit rating on Aug 5 from AAA to AA+ in the history as USA is no long suitable for AAA that is the highest issuer credit rating. Europe has been carrying with the debt issue in Greece , uneasiness of financial difficulty in Italy, Spain. In addition, the sudden drop in stock in the world might cause the financial crisis in the world economy.

The new production stock in the factory in China has increased to over 800,000 teu from 500,000 teu at the end of June. As the result, the new production price has been lowered to $2,400 per 20f. It is said that some factory has been reduced or stopped the production to block lowering the price. Leasing companies have already stopped ordering and taking an wait and see attitude. The new production price would be settled at the most comfortable position after being adjusted by the steel price, labor cost etc. the order from the shipping lines would be the key to Chinese factories. Most of shipping lines have been returning the expired L/T containers and they are replacing with the new own production. on the other hand, the leasing firms have been trying to sell these old containers which have kept them higher utilization such as 96~98%. Shipping lines could manage without any problem in the peak season of Sep & Oct. More 2nd hand containers appear in the 2nd market but no big drop in the selling price.
On Aug 1 GE SeaCo, No. 5 largest lessor in the world operating 870,000 teu has been sold to HNA Group (China) and Bravita Capital (USA) at the selling price of 1.05 billion dollar. It would be a great fun to see the old giant to come back after revival.

We took a vacation from July 19 to 28 for 10 days to visit in Belgium, Holland as my long wish. First of all, we landed at Frankfurt and took ICE to visit Gent, Antwerp, Brugge, Den Haag, and Delft, Utrecht based on Brussels, Rotterdam and Amsterdam. We walked as much as possible utilizing the subway, the tram. It is quite amazing to see that the old part of the town has been kept as it was wherever we go. We mainly visited the museum but the old town itself is the historical heritage. It would be easily imagined the prosperity of 17 century in Holland. The prosperity of Amsterdam would be indescribable brought by the Dutch East India Company at the center of the world ports. It is quite surprising to us that they are the canal town with not much difference between the land level and the water level. In addition it would be outstanding to see many Arab people with many women in the scarf to cover their head and they accompany with their baby and children. They would be different from USA that is called a melting pot of races. There is the origin of uniqueness, tolerance, collaboration, maturity of Europe. We saw many Chinese tourist groups. As a result there were two oriental staff who could speak a fluent Chinese and speedily handling the tax refund documents in the Frankfurt Airport. It was a quite different from our bad experience happened 3 years ago with no tax refund admitted due to no goods shown to them after over 2 hours in the waiting line and we could finally catch our flight as the last boarding passengers after paging. The most of goods were attached with Chinese explanation. Many Chinese guidance catch our eyes. It would prove the many Chinese tourists. In Belgium, Holland there were many smokers seen especially woman smokers. They could not compare with China, Korea. There were many overweight people. They ate a lot. A dish volume served in the restaurant would be too much to Japanese. They seem to finish two dishes, three dishes with beer and wine while talking with their friends. Such big volume of food must be necessary for them to maintain their physical strength. However, it would be fun for us to enjoy the local dishes regardless of volume and taste. We have been impressed with people’s kindness this trip as well. We had to bother the store clerk of the small shop near the coin locker because I had completely lost how to manage it and nothing but asking him to how to do it. He closed the shop with the shutter every time I asked his help because of one man shop. The coin locker could only accept the credit card so that it was quite difficult for the foreigner to handle it without help. But he refused my tip for our appreciation but willingly accepted small gift brought from Japan. It would be unforgettable to encounter unexpected kindness from people and to meet with nice people during the trip. We met with young married couple in the 3 hours ICE train from Frankfurt to Brussels. The husband is an Iraqi and his wife is a beautiful Russian. They live in Dubai due to his job. They travel in Europe for vacation for about one month every year. We had talked each other about ourselves and about our country. Thus, we invited them to come to Japan where they could enjoy the totally different atmosphere. It would be important for people in the world know people in the other countries. It would make our life more enjoyable. I often feel that the time in the traveling overseas would be slower than living in Japan. It proves that variation in our life would add more value to our life? In this point I would like to recommend you to go overseas.