It is said that New Year’s Day is the day to make our plans for the year. I always feel refresh in the first day of the new year every time I get old. I made several resolutions this year even if my past resolutions had hardly been attained. I will have a positive mind how much Yen would be deteriorated. I would like to make people feel happier through doing business with us. I would like to be mentally tougher as the leader and so on. My resolutions are all related to the business. I could hardly think my life is without business. Each people have to live in the own way and live their life to the end. It is a trite saying that we should do our best in living our life without regret. Nobody know that it would be rewarded or not until it ends. It could be the view of third party. It is no problem as long as he could be satisfied by himself. However, I want to challenge myself with my own dream just for a little more.
The US Economy has been in good health. One of the major economic indicators is the sales of new cars in USA. It exceeded more than 15.6 million units in 2013. It increased 50% up more than one in 2009, the next year of Lehman shock. Latvia, one of 3 Baltic countries has introduced the currency Euro from this year. There come to 18 countries. Some of Central and Eastern European countries would possibly join to the Eurozone later. Is it the proof that Eurozone has been stable? There are 330 million in population, with GDP of 12 trillion dollar in Eurozone which is more than double of Japan GDP.
On the other hand, Association of Southeast Asian Nations (ASEAN) will start as ASEAN Economic Community at the end of 2015. There will be created the market of 600 million in population. Their trade values in ASEAN was 601 billion dollar in 2012 and tariffs in the region will be totally abolished by 2018. The current GDP, 2.2 trillion dollar would increase double to 4.5 trillion dollar in 2020. Division of production in the region would be the motive power of economy. Asia will continuously lead the world economy.
The big events which could have Ripple Effect for world economy this year are:
1)Chinese New Year from Jan 31 to Feb 5 for 6 days off.
2)XXII Olympic Winter Games in Sochi in Russia from Feb 7 to Feb 23
3)2014 FIFA World Cup from Jun 12 to July 13 in Brazil
4)Midterm Election in USA on Nov. 4.
These would be expected to stimulate the world economy upward.
The year of 2014 seems to be a tough year to Shipping lines as well. The new containerships of 1.62 million teu slot will be introduced in 2014 and in 2015 total 1.76 million teu slot to be planned to be introduced. On the other hands the containerships of 450,000 teu were scrapped in 2013, its average age is 22 years. A feeling of surplus of ships could not avoid affecting lowering the freight rate to some extent. Many shipping lines have been securing fund by selling their old own fleet or doing Sales and Lease Back deal with leasing companies or 2nd hand dealers. We could see some news reported by the trading newspaper last year. Evergreen Line sold 32,000 units and added 1.6 million dollar as a net profit. Hyundai Merchant Marine acquired 162.9 million dollar after selling 71,000 units. This scheme seems to have been one of fund acquisitions among shipping lines. Regular container acquisition every year would be better to shipping lines if it has been attained to certain percentage of total fleet. It would be recommendable that 3 pillars of container acquisition consisting of own, long term lease and master lease should be made according to the scale of each company.
The number of New Container in factories in China seems to be less than 400,000 teu at present. Container makers seem to stop production for 1~2 months after Chinese New Year. They have been refraining from quoting any container price. However, the price would be around $2,100 per 20f.
Textainer reached 3 million teu in the total operating fleet at the end of 2013.
Bipolarization is taking place among leasing companies. The purchasing will of the lease companies is excellent. Surplus fund in the world seem to have concentrated on leasing companies to seek for better investment. Excessive competition has started among leasing companies in survival race. Leasing companies will have to face the difficulty this year. I am deeply concerned about their scale expansion policy. They seem to have been maintaining over 90% in utilization ratio. Their idling containers have been gradually increasing in the world. Especially for sale containers. Mismatching the sale containers must be a pain in the neck. How soon they could dispose with the old containers is the turning point of profit. In addition, the sales price of old containers have been deteriorating in the world these days. In other words the leasing companies seem to have taken a risk in increasing cost.
There is the optimum size on everything to meet the market. Therefore, the market could not accept it if it deviate in the size. This is the principle of a thing. The market competition principles could not be adjusted till it reach to the end? We will need rational thought to adjust the excessive market competition principles somewhere. We must consider again what the proper market competition principles.