Container Shipping Bankruptcy Lends Insight on Potential Fallout from Trade War
Global trade tensions have captured headlines in recent months, as the imposition of a series of tariffs and counter-tariffs by various global trade counterparts has raised questions about the possibility of a trade war. Such development could potentially have an impact on global trade flows, and, consequently, the companies which facilitate international movement of goods.Though the situation is still developing and the final impact is uncertain, Gregory Draco, the Chief U.S. Economist at Oxford, predicted in July that the tariffs would create an 0.1 percent to 0.2 percent drag on U.S. GDP.
CAI International Reports 4Q Loss
San Francisco, California-based CAI International Inc. (CAI) has reported a fourth-quarter loss of $12.6 million, compared to the profit in the same period a year earlier. CAI aid it had a loss of 62 cents on a per-share basis. Earnings, adjusted for one-time gains and costs, came to 52 cents per share. The transportation finance and logistics company eported revenue for the fourth quarter of 2015 of $65.7 million, an increase of $6.9 million or 12% compared to the fourth quarter of 2014. Lease-related revenue for the fourth quarter of 2015 was $59.7 million, an increase of $0.9 million, or 1%, compared to the fourth quarter of 2014. Lease-related revenue for the full year increased 5% to $238.2 million.
US Intermodal Container Leasing Market Report
The Intermodal Container Leasing industry is heavily dependent on large-scale domestic and international trade levels. Thus, as consumer spending fell during the recession and demand for goods across the economy dipped, fewer containers were needed for the transport of products. However, China's resilience and strong growth throughout the past five years, and the United States' close trade ties to that nation, kept demand for containers used for international trade high. As the US economy continues to recover, the industry is expected to keep growing at a brisk pace. Operating in the Intermodal Container Leasing industry has become a growing part of business for many shipping companies, with many firms leasing just under half of their total container fleet.
