Container Market Report April 2014

I left for Shanghai on March 30 (Sun) to attend the Intermodal Asia 2014 held in Shanghai from April 1 onwards. However, Yokohama was a watery sky on the day when I left. Therefore, I wondered if I should take an umbrella with me because of a wet umbrella was troublesome after use. It was lucky that rain stopped before 7 am so that I rushed to the station not to miss this chance without an umbrella, where it was about 10 minutes by walk. The rain started heavily after I got the station. On the other hand the wind made people feel the temperature of about 10 degree C in evening and morning colder.

Usually at the end of March the cherry trees in the park next to our office building and a hundred of cherry tree lined path to the Kodosan temple on the hill used to blossom. The place is famous for its cherry-blossoms where it gives a gorgeous cherry-blossom viewing point. We invited our customer there last week but the buds of the cherry trees were still young, which represented a symbol of late spring.

The temperature completely changed in Shanghai when I arrived at. It was warm spring weather without a jacket. However, they said that it was rainy and slightly cold in Shanghai last week. Spring weather should be changeable at any places. Visiting Shanghai this time made me feel that it is not like Beijing with heavy smog in pictures but it caused me a sore throat a day and never free from it during staying Shanghai. It has never been felt like that in the past. It means that air pollution has been serious. Government has to improve the situation as soon as possible in order for ordinary people to make the city comfortable in living as well as recovering beautiful city of Shanghai.

In Shanghai a taxi fare is cheap so that I used to stay the hotel in the suburbs of Shanghai. Thus, I took a taxi to the venue of Intermodal Asia in Pudong. It was about 30~40 minutes. The taxi fare is around 70 Yuan. This time I never experienced a heavy traffic jam as I tried to use Highway to Intermodal and the office in the downtown at the commuter rush hours in the morning during my stay. Therefore, there must have been taken many measures to solve a traffic jam by Shanghai municipal. I noticed one thing this time. It was that many taxies drove at a terrible speed than before. All muscle of my body had been tight in the taxi. However, their faces had been quite serious. I could feel that their eagerness for working hard to become rich. However, most of taxi drivers could not know very well about Shanghai city so that it is always not easy to get them to a remote place.

In the venue of Intermodal Asia the major leasing companies, container makers and Reefer unit makers have a large booth respectively and many Chinese container part makers, product makers related to container could support Intermodal show. There were several interesting products and unique companies. Some of them showed their interest in doing business with us. Intermodal show is the place where manufacturers and buyers meet there and to find a reliable partner each other. In a sense more depot handlers, repair companies, forwarders and so on could attend and introduce their business of specialty to get them known to others to expand their business. More business partners could make Intermodal show more meaningful.

Information came to my ears that CIMC has adopted 2 shift of production line and accept more order by lowing the price. Its news could make leasing companies and shipping lines upset because they have already ordered certain volume of their new containers from CIMC at the higher price. Major leasing companies could take this a chance to place an order with CIMC for more. On the other hand, other container makers could do nothing but follow to CIMC. The price is said to be $2,150 per 20f.

The trade papers announced 2013 business result of the major world shipping lines. The four lines of Maersk, CMA-CGM, OOCL and Wan Hai Line were only in the black. The freight rate per container has been lowered under the freight rate war. Therefore, shipping lines have been enduring in the black by cost cutting such as saving the fuel, selling their asset and so on. The key factors to be in the black is to introduce mega-containerships and to be united into a big alliance. FMC of USA has approved P3 Network consists of Maersk, CMA-CGM, MSC at the end of March this year and FMC approval to G6 for expansion from Asia to USWC and to Atlantic route was effective on April 4. Shipping lines have made an effort in cost cutting and risk distribution.

National Retail Federation (NRF) published that the number of import containers was recorded by 15% up to 1.31 million teu in March and they will prospect April import to increase by 6.1%. However, the labor contract with the International Longshore and Warehouse Union (ILWU) expired in June will have a key of cargo flow in coming months. USA economy has been steady improving. Shell revolution has given USA confidence and it will encourage manufactures return to USA. It will be a good news to Japan. So we would like to watch it closely for a while.

We, EFI introduced Magnum Plus to Kyowa Shipping and they decided to use it. Kyowa Shipping is the first shipping line who uses Magnum Plus among Japanese shipping lines which will be kept long in our history. So Thermo King introduced Kyowa Shipping into their quarterly magazine of the 20/40 as spring version. At the same time Japanese trade papers also introduced the article of Kyowa Shipping using Magnum Plus. I would like to express my deep appreciation to them. Magnum Plus is only unit capable to attain minus 40 degree C. I think Kyowa Shipping case would be a good chance for major Japanese shipping lines apply to Magnum Plus which could maintain minus 40 degree C and they could solicit more frozen cargo with Magnum Plus. It is well known that minus 40 degree C could keep quality of frozen cargo better than minus 30 degree C. Strong cooling capacity could maintain better quality and we would expect sales people of shipping lines could make their shippers happy. As a result, strong cooling capacity could bring them much energy saving. It is said that gas exchange frequency with Magnum Plus could be minimized comparing with other makers. It is because of simple structure of Magnum Plus. In the life span of reefer unit it would be quite economical. I sincerely expect that many Japanese users would notice it before Magnum Plus get more popular overseas.