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

Finance

Bollore Africa Logistics Sees Profit Plunge in H1

First half 2014 profit at shipping company Bollore Africa Logistics plunged to 5.89 billion CFA francs ($11.48 million) from 9.45 billion CFA francs in the same period last year,

Maduro Says Venezuela's 2015 Budget to Put Oil at $60

Venezuela's 2015 budget will be based on a target oil price of $60 dollars per barrel, President Nicolas Maduro said on Friday night, but he repeated expectations that prices will recover.

No Merger of Yara & CF Industrie

Yara International ASA and CF Industries have terminated their discussions regarding a potential merger of equals transaction. "This has been a constructive process,

News

Missouri River Basin is Booming

The U.S. Army Corps of Engineers Missouri River Basin Water Management Division is maintaining above normal releases at the four lower dams on the Missouri River.

Bollore Africa Logistics Sees Profit Plunge in H1

First half 2014 profit at shipping company Bollore Africa Logistics plunged to 5.89 billion CFA francs ($11.48 million) from 9.45 billion CFA francs in the same period last year,

Twin Disc Offers Virtual and Real EJS Experience

Visitors to the Fort Lauderdale International Boat Show, October 30–November 3, 2014, can experience what it’s like to control a diesel-powered, conventional driveline

Logistics

Missouri River Basin is Booming

The U.S. Army Corps of Engineers Missouri River Basin Water Management Division is maintaining above normal releases at the four lower dams on the Missouri River.

Bollore Africa Logistics Sees Profit Plunge in H1

First half 2014 profit at shipping company Bollore Africa Logistics plunged to 5.89 billion CFA francs ($11.48 million) from 9.45 billion CFA francs in the same period last year,

GAO: Ending Crude Export Ban Could Ease 'Price at the Pump'

As the energy profile of the U.S. continues to improve and evolve daily, fresh debate in favor of exporting oil and gas products -- which would have a significant impact on the U.

 
 
Maritime Careers / Shipboard Positions Maritime Security Naval Architecture Navigation Offshore Oil Pipelines Pod Propulsion Ship Electronics Ship Repair Shipbuilding / Vessel Construction
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: 0.3137 sec (3 req/sec)