Ocean Cargo: Shortages of Containers Reaches “Crucial” Levels

The shortage of containers has reached critical levels, with lines blaming the shortage on “exceptional” high demand which developed since the Chinese New Year in February, noted analysts for Alphaliner.

According to the Paris-based container shipping consultancy, prices for new containers have soared to their highest levels in almost 20 years as both carriers and container leasing companies rush to place fresh orders to meet the new demand.

Even at these higher prices, demand will still outstrip supply for the current peak season. Container manufacturers are facing difficulties in restoring full capacity following the halt in production of dry containers since October 2008, the report stated.

Total capacity at the main container producers have been cut back significantly since late 2008, as production lines were shut and twin-shift operations re-duced to single shifts.

Although annual production capacity at the two largest container manufacturers, CIMC and Singamas, is over 3.5 million twenty-foot equivalent units (TEUs), these two sup- pliers are expected to produce only 1.35 million TEUs this year. The global output of new containers is estimated at 1.5-2.0 million TEUS for the full year, well down from the peak of 4.2 million TEUs produced in 2007 and a global capacity of 5 million boxes.

Meanwhile, demand has picked up significantly since the beginning of the year. CIMC is reporting sales of 102,900 TEU of dry van containers in the first quarter alone, compared to 60,400 TEU in the whole of 2009.