Container Market Report October 2014

The front-page headlines in the newspaper popped up in my eye with the article of Japanese 3 scientists (Isamu Akasaki of a professor at Meijo University, Hiroshi Amano of a professor at Nagoya University, Shuji Nakamura of a professor at California Santa Barbara) were awarded the 2014 Nobel Prize in Physics for their contribution to developing the world’s first blue light-emitting diodes (LEDs) which is said to be the most difficult LEDs to develop. Blue is the third primary color of light which can produce any colors including white by mixing 3 colors. Therefore, blue LEDs should be an epoch-making invention. On top of that LEDs could illuminate brighter with consuming less power. LEDs is a light revolution.

According to Japan LED Association LEDs could save the electricity charge by 85% for individual housing under the situation of turning on the light for 5 hours per day continuing for 10 years in comparison with an incandescent lamp and for the facilities and stores LEDs could save by 85% under the situation of turning on the light for 10 hours per day continuing for 10 years. There occurred no maintenance fee with LEDs but in case of an incandescent lamp 9 times of changes were required for home and 18 times of changes for the facilities and stores. Considering the maintenance fee LEDs could bring us immeasurable impact for the cost saving. Therefore, we could expect LEDs to be applied in various kind of fields.

Most rooms of our house were changed to LEDs 3 years ago because the lifespan of LEDs could be surprisingly long. The lifespan of LED is about 40,000 hours and it will be normally used for over 10 years. Thus, our LEDs could not be changed for 7 years or so. I remembered that I changed an incandescent lamp several times a year and I just had a hard time due to no stock of it.

We could save yearly 228,000Kl, equivalent to crude oil carried by one large vessel of oil tanker if the traffic signals of the whole country in Japan could be changed to LEDs. We could reduce crude oil on a large scale if all housing, public facilities, stores, offices could start using LEDs. LEDs could not only illuminate the world cities brighter with low cost but could contribute to global warming to large extent. Thus, LEDs could be referred to an illumination evolution. However, it is not too much to say that LEDs would be an energy evolution in energy saving point of view.

Meantime, Japan economy would be serious due to rapid Yen depreciation. Yen dropped 6 yen against US dollar from103 yen at the end of Aug to 109 yen on Oct 1. Yen temporarily was recorded less than $1.00=110yen on Oct. 1. Yen will be predicted to continue to fall $1.00=115 yen by the end of the year. As a result a flood of the raise in food prices (coffee beans, wine, cup noodle etc.) will start from Nov onwards. On top of that, sharp rise of vegetables has been caused by unreasonable weather. The insurance rate of an employees’ pension has increased to 17.474% from Sep so that 8.737%, half of an insurance rate should be automatically deducted from the salary of employees. Real wages except price increase have been fallen compared with the same month a year earlier for 14 consecutive months as of Aug. It would be very hard to expect a personal consumption hike. Therefore, I would request the Prime Minister Abe to carry out many, immediate effect as the 3rd arrow of growth strategy (as Blue LEDs?) in order to illuminate the way of our future.

This Yen depreciation would not enough encourage the manufactures to return Japan. Container operation costs in Japan are expensive comparing with neighboring countries. It has been a long time since shipping lines and leasing companies keep no stock in Japan. Shipping lines still move them in empty to China for repair from Japan if containers have heavy damage. Meantime, yen depreciation boosted export in 2nd hand container market. Therefore, each port has been suffering container shortage of 2nd hand containers. Japanese used cars are very popular overseas. Popularity of Japanese used cars overseas has caused demand of 2nd hand containers in Japan these days. The number of export of used cars in 2013 was 1.16 million cars. It has been improving gradually after Lehman shock and it has been close to the figure of 1.34 million cars of 2008. About 40% of export of used cars has been used by the containers.

Thus, Japan is the one of the best places where shipping lines and leasing companies could sell their old containers. The purchase price of old containers in Japan could increase due to weaker yen. However, I think that strong popularity of Japanese used cars overseas and this weak yen could support steady demand of 2nd hand containers in Japan.

5 year Long term lease rate would be in down trend among severe completion among leasing companies. Consequently leasing companies have been refraining their order of new container with container makers. Therefore, container makers have been lowering container price in order for them to encourage leasing companies to continuously order new container from container makers as speculation. The current sales price is falling to $2,000 per 20f. Shipping lines seem to have been increasing portion of long lease from leasing companies according to lowering leasing rate of long terms. The number of new containers in the factories in China seems to be maintained in the level of 540,000 teu by the end of Sep.

There are not much bright topics in Japan nowadays. The news of 3 Japanese Nobel prize laureates in Physics have encouraged us a lot. It will give scientists who have been facing difficulties lots of powers and will ensure young researchers lots of hopes. It is no easy matter to discover and to invent. On top of that to make it practice is also to require steady effort. What they say in a chorus is to continue patiently what you believe it right. To prove one thing is only to confirm one by one by experiment. For that purpose it is inevitable for researchers to study with a strong will, confidence and hope. His study would be handed over to others even if he could not rewarded socially. Therefore, his study could not be useless.

This would apply to business world as well. Companies have existed for many years which should have been meaningful. Our company, EF International Ltd will enter into 6th business year. We have acted as the agent of 6 leading companies in the world such as Thermo King produces magnum Plus which could attain minus 40 degree C, TydenBrooks who has over 100 years of history in security seal business, Future Box who have an patent for Hybrid Open Top container and Sliding Door Container and Mirai Hi-Tec who is a good quality of chassis maker. We would like to dream that our customers are happy to buy these products some day and would like to challenge until then with confidence of good quality of products to be sold without fail.