Weak Financials Drive Container Leasing Sector - Drewry

By Joseph R. Fonseca
Wednesday, August 06, 2014
Container Leasing

 

The container leasing sector experienced another year of stellar growth in 2013 thanks to the continuing weakness of carrier financials, according to Drewry’s recently published Container Leasing report. And Drewry forecasts that this trend will continue.

The leased container fleet (teu) expanded 7.3% in 2013, fast outpacing the 2% growth recorded by the fleet owned by transport operators, most of whom are shipping lines. This brought lessors’ share of global inventories to an eight-year high of 46%, which marked a 6 percentage point gain on 2009.

“The leasing sector’s fleet growth has outpaced that of owner operators for each of the four years since the worldwide recession of 2009,” said Andrew Foxcroft, author of Drewry’s Container Leasing report. “This is because the changed financial climate has left the container shipping industry heavily in debt and unable to easily access capital for investment. Carriers have been forced to turn to the leasing sector to renew their container equipment fleets.”

This contrasts with the preceding five years (2004-08) when operators’ fleet growth fast outpaced that of the lessors. While most of last year’s acceleration in the leased fleet was achieved through investment in new container equipment, it was by no means the only source of growth.

“Purchase of used equipment from cash-strapped shipping lines, by way of sale and lease-back, also helped propel the leasing sector,” added Foxcroft. “This action, together with operators’ more limited investment in new equipment, explains why shipping lines’ more recent rate of fleet growth has been so small.”

Of the various container equipment categories, lessors appear to be gaining most ground with reefers. Drewry estimates that the leased reefer fleet doubled in the four years to 2013 and grew its share of the overall fleet from 30% to 40% over the period.

However, it has not been all good news for the container leasing sector. Drewry’s report highlights how rental cash returns from the lease of new equipment fell to a new low in 2013. “Returns are now lower than they were in 2009,” noted Foxcroft. “The recent rate erosion has been due to the expansionist antics of top leasing firms, most of which are still chasing market share growth in order to maintain investor interest and draw in further capital funding for investment.”

Looking ahead, Drewry forecasts that growth in the container leasing fleet will continue to outpace that of the owner operator sector. However, the gap between the two is expected to narrow as transport operators finances improve and their commitment to a greater level of direct investment rises.

Maritime Today


The Maritime Industry's original and most viewed E-News Service

Maritime Reporter April 2016 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

Finance

MARAD: $5 Mln Available for Marine Highway Projects

The Maritime Administration (MARAD) has announced the availability of $5 million in Federal funding to expand marine highway service by creating new or expanding

Baltic Index Down on Lower Capesize, Panamax Rates

The Baltic Exchange's main sea freight index, tracking rates for ships carrying dry bulk commodities, slipped on Friday, as demand for capesize and panamax vessels fell.

Oil Rally is Not Just About Hedge Funds: Kemp

Oil prices are becoming dangerously overheated as speculators anticipate a rebalancing of supply and demand that has barely started, according to many oil analysts.

News

Mercury Marine Expands Manufacturing Capacity

Mercury Marine is adding a 53,000 square foot manufacturing capacity expansion to its global headquarters in Fond du Lac, Wisc. The expansion will consist of 45,

Conquest Installs 850t Crane on Allseas Solitaire

Conquest Offshore was contracted by Allseas to remove a 300-ton crane and transport and install a 850-ton Huisman crane on board of one of the largest pipe-lay vessels in the world, Allseas Solitaire.

MARAD: $5 Mln Available for Marine Highway Projects

The Maritime Administration (MARAD) has announced the availability of $5 million in Federal funding to expand marine highway service by creating new or expanding

Logistics

MARAD: $5 Mln Available for Marine Highway Projects

The Maritime Administration (MARAD) has announced the availability of $5 million in Federal funding to expand marine highway service by creating new or expanding

New Shipping Firm Sets up in Vancouver

A new shipping company has established itself in Vancouver as the Vancouver International Maritime Centre (VIMC) completes its Asia tour, launching in Tokyo, Singapore and Hong Kong.

Drug Interception at Red Hook Container Terminal

Approximately 121 pounds of heroin and eight pounds of cocaine were discovered in a shipping container of vegetables that was moving from Ecuador to Miami, Fla.

 
 
Maritime Contracts Maritime Security Maritime Standards Navigation Offshore Oil Pipelines Pod Propulsion Ship Electronics Ship Simulators Sonar
rss | archive | history | articles | privacy | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.0870 sec (11 req/sec)