US Intermodal Container Leasing Market Report

'Intermodal Container Leasing in the US Industry' market research report published by IBISWorld

Excerpts from the report are as follows:

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. In the past three years, companies that solely lease containers have benefited from renewed consumer spending that flowed through the supply chain as increased demand for goods, particularly those sourced from or destined for overseas locations.

In the past three years, companies that solely lease containers have benefited from renewed consumer spending that flowed through the supply chain as increased demand for goods, particularly those sourced from or destined for overseas locations. “For some larger freight firms,” says IBISWorld industry analyst Josh McBee, “leasing part of their container fleet provides supplemental income and increases operational flexibility with regard to the use of otherwise idle containers.”

During 2009, all of the industry's major markets suffered reduced shipping activity and decreased their demand for containers. Consumer spending fell in line with higher unemployment and decreased disposable income. In turn, orders for goods throughout the supply chain fell. As the effects of weak consumer demand rippled through the supply chain, demand from road, rail and water freighting all fell by double digits.

In turn, industry revenue fell an estimated 10.4% during the year, as fewer containers were leased. According to McBee, the constant for container-leasing firms during the period has been strong demand from emerging economies, especially China. A favorable trade-weighted index has made American goods more affordable on the international market. US exports to China have been steadily increasing during the past decade, and the vast majority of these shipments arrive in intermodal containers.

This offsetting factor is expected to sustain average annual industry growth of 4.0% during the five years to 2012. The Intermodal Container Leasing industry has a fairly low level of concentration; only three companies – TAL International, CAI International Inc. and SeaCube Container Leasing Limited – capture more than 5.0% of the market, and the majority of firms are regional operators.

Looking ahead, revenue is expected to increase 7.4% and total an estimated $2.1 billion in 2012. As consumer confidence slowly returns in line with falling unemployment, orders for goods throughout the supply chain will increase, in turn driving continued growth in container leases. IBISWorld also forecasts growth in each of the industry's downstream markets (road, rail and water freight), which will spur ongoing increases in the total US container fleet.

High and rising steel prices will remain the major thorn in the industry's side: Containers are largely constructed from steel, and high steel prices increase operating costs for leasing firms. It is projected that many firms will attempt to increase their leasing rates to offset higher input costs. As such, industry revenue is forecast to increase through 2017.

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