Container market Report July 2011

The rainy season ended about two weeks earlier on July 11 (Mon) all over Japan. The fierce heat over 35 degree C has been hitting Japan since then. In Kanto and Tohoku regions the ordinance of Electric Usage Restriction has been effective from July 1 to force the big electric users to save by 15% in comparison with the max electric consumption of last summer. It will continue from 9 am to 8 pm in the week day till Sep.22. Japanese private corporation would be quite cooperative to Government in power saving. To put it the other way around they have to protect themselves from lack of policy of Japanese government. The automobile industry as the key industries of this country has just started working on Saturday and Sunday while Thursday and Friday are closed due to effective electric power consumption. Other industries have also cut down on electricity by own way. I would like to take my hat off for their effort.

Power shortage has been extending throughout the country. The reason is why 35 out of 54 nuclear power plants have been stopped in operation after the periodical inspection due to doubt of its safety on disaster. All 54 nuclear power plants would be possibly stopped by the next spring. The nuclear power plants shares 30% of total electric power in Japan. In the meantime, it is said that the private power‐generation facilities (the so-called buried electric power) would be 60 million kilowatt. This would be equal to the electric power generated by 54 nuclear power plants in Japan. We should take advantage of this buried electric power in this state of emergency. However, we could not freely use the power supply facility of the existing power companies. Why not political power change its regulation. Japan’s challenge is to change the vested public institutions to more opened public institutions for ordinary people. It would ensure us more business chances.

In the morning of July 13 the exchange rate recorded $1.00=\78.48 which is the highest since $1.00=76.25 on March 17 after the East Japan Mega Earthquake. It is up to us whether it would be crisis or chance. Can we consider that this Yen’s appreciation must be a big expectation of the world to Japan for remarkable recovery in devastated area after 4 months. The world would be eager for more Japan to advance overseas. Japan’s purchasing power has been growing in the world. It would be a good chance for factories to be moved to overseas. Domestic employment would be reduced accordingly. However, it would not be solved if we would be introverted. To Japanese! Let’s watch overseas! The consideration that Japanese have about other people would be highly appreciated by many foreigners. Such tender-hearted feeling would be the treasure of Japanese. It would reduce the language barrier of Japanese half. To Japanese! Let’s go overseas! I would like to propose that language should get accustomed to actual practicing, not to learning by book. Japanese should think after action. Therefore, going abroad first and acquire the language! Especially young people should not hesitate to go abroad and find the job. Please do your best. There is the way before you.

China container factory inventory has been reduced by 46% to 540,000teu, the end of June from over 1 million teu, the end of May. Most of reduced quantity would be picked up by shipping lines. Some shipping lines have still untouched major volume of their concluded L/T committed last December. Therefore, most of leasing companies have stopped an order for new production. As a result, the new production price is about $2,650 per 20f. The one of the major container makers seems to have secured the production line with the special discounted price. Some maker might cut down their production volume or stop production. I am wondering how the container price would be after the peak season.

How many people know about COA? COA stands for Container Owners Association. COA has been established in Nov, 2004 in London of which members consist of mainly shipping lines and container makers, container leasing companies, container parts supply companies and container related companies which have made COA unique and meaningful.

The 8th COA members Meeting was held in Shanghai from June 20 to 21. Mr. Nam, President of FBC was one of the speakers about Hybrid Open Top and Sliding Door. I also attended the meeting as one of FBC staff including “Welcome to Shanghai” reception at the night of June 19. It was quite a good experience for me to have attended at International convention. The registration of the meeting on June 20 started at 8:30 and the attendants got their name tags at the reception desk and took the seat freely and listened in speech eagerly. There were 187 attendants which is the largest in COA history. COA meeting has been held in Shanghai 3 times on end. It is no wonder if we think that Shanghai is the most active city in the world now. COA is 8th anniversary this year. It is said that it has been growing with young people including many ladies year after year. The meeting started at 9:15 and took lunch break for 1 hour 15 minutes. Many speakers had been waiting for their speech turn momentarily. The timely topics in their speech have been made by the active person in charge of each company. I would like to introduce part of their speech title and speaker’s name.

Widening the Panama Canal: Impact on Container Shipping
Presented by Mr. Oscar Bazan, Marketing Manager, Panama Canal Authority
2) Container Shipping, Ports and Intermodal by development of mega-ship and mega-port.
by Mr. James Huang, Director, Transport & Logistics Equipment Bureau Veritas.
Container and intermodal developments on the Yangtze Corridor
by Mr. Federic Campagnac, Transport Consultant, Clevy China.  
Container manufacturing; current status, future challenges
By Ms. Angela Wang, Vice President of Dong Fang International Container

The speakers and attendants were quite sincere and eager but the tea break time brought them friendly atmosphere to exchange their opinion. People attended many times have been acquainted with each other. The various problems they are facing would be raised and discussed and some solutions were found. Thus, this meeting would be meaningful and valuable to all attendants, I am confident.
It was regrettable that there is no member of Japanese company in COA except the joint ventures, much less no Japanese attendant except me. It was true! It should be highly appreciated that COA presents the opportunity of working together for the current problems and tasks to find the key for solution. It is a long time since globalization has been highlighted in Japan. It has become a dead letter already to Japanese. Most of Japanese have been introverted? Japanese should modestly listen in the opinion of Asian people. We have to understand our duty as member of the world and Japan still have a chance to take large step toward becoming an ideal country in expectation of people in the world, I am convinced. I sincerely would like to ask COA for aggressively approaching Japanese shipping lines and others. I believe that COA will become more valuable international organization after gaining the wider support by many companies of different countries.