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 Reporter November 2014 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

Finance

Cecon Secures Finances to Complete Newbuild

Cecon ASA has petitioned for a debt restructuring agreement (in Norwegian: gjeldsforhandling). Certain funds managed by York Capital Management Global Advisors,

BP Faces Heavy Hit from Former Prized Asset Rosneft

BP faces a first and heavy loss from its stake in Russia's Rosneft due to plummeting oil prices and a crumbling rouble, potentially forcing it to write down the value of its once-prized asset.

Libyan State Oil Firm NOC Will Remain Independent

Libya's Tripoli-based state firm National Oil Corp (NOC) will remain independent, it said on Thursday, in an apparent attempt to reassure foreign oil buyers it will stay out of the country's conflict.

News

WSC CEO Koch to Retire in 2015

Chris Koch, current president and CEO of the World Shipping Council (WSC), will retire from his position on July 31, 2015, and WSC Senior Vice-President and General Counsel,

NMEA Updates Installation Standards

2014 edition of NMEA 0400, Version 4.00 features extensive updates and new information   The National Marine Electronics Association (NMEA) has published Edition 2014, Version 4.

Port of Galveston to Repair Public Pier

Galveston Wharves’ board of trustees today unanimously approved a project to repair pilings and pier deck in the Pier 19 area of the port. The board awarded the contract,

Logistics

WSC CEO Koch to Retire in 2015

Chris Koch, current president and CEO of the World Shipping Council (WSC), will retire from his position on July 31, 2015, and WSC Senior Vice-President and General Counsel,

US Shippers, West Coast Dockworkers Union Resume Contract Talks

Negotiators for shipping lines and terminal operators at 29 U.S. West Coast ports resumed contract talks with the union for dockworkers on Thursday, as cargo backups continued at the ports,

Great Lakes Coal Trade Slows in November

Coal shipments on the Great Lakes totaled 2.6 million tons in November, a decrease of 3 percent from a year ago, as shipments were affected by weather-related delays,

 
 
Maritime Careers / Shipboard Positions Maritime Contracts Pipelines Pod Propulsion Port Authority Ship Electronics Ship Repair Ship Simulators Shipbuilding / Vessel Construction Sonar
rss | archive | history | articles | privacy | terms and conditions | 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: 0.1263 sec (8 req/sec)