Container equipment fleet oversupply catches out buyers

The underlying reason for the slowdown in the latter half of 2011 was an apparent misreading of demand. Few buyers predicted an over-supply (900,000 teu at mid-2011, and over 500,000 teu end-2011) that was exacerbated by a weak peak season. Even so, utilisation of the in-service fleet held at a very high level, topping 95%.

One knock on effect of high utilisation is that container-to-slot operating levels have dropped to historic lows, close to 1.8:1 in 2010/11 compared to 2:1 immediately preceding 2009. This has been achieved by shipping companies working their assets harder, which considering the increasing container dwell times resulting from slow steaming, is something of an achievement. Andrew Foxcroft, author of the Container Census report, forecasts annual container fleet growth will be in the order of 7% from 2012-2015 as shipping companies continue to adopt a tight container/slot operating ratio, whilst also increasing replacement purchase in comparison to 2010-2011.

Fleet growth since 2009 has continued to be dominated by leasing companies who have posted growth (teu) of 10.6% in 2011 and 9% in 2009, compared to shipping lines and other transport companies only registering 7% and 5.7%. Investment by shipping lines in particular was curtailed when their profits slumped and debts rose. However some lines have tentatively resumed equipment investment, but they are still very much testing the waters.