Wednesday, 16 January 2013

Shipping Container Shortage is a Sign of Economic Growth


shipping port loading shipping containers
Many industry analysts agree that the global financial crisis, has contributed to a significant imbalance between supply and demand, in the international container shipping industry. In 2008-2009 shipping container production dropped 95 percent, which created a shortage until 2011 when production was able to approach the steadily growing international demand. In turn, this shortage in shipping containers resulted in a rise in freight rates, and has been responsible for difficulty in moving consumer products; to the global marketplace.

Despite any economic downturns and financial uncertainty in the past, world trade values are expected to grow by 19 percent from 2011 to 2014, which will result in a (almost) 90 percent increase; since 2005. In light of the current economic situation, many container leasing companies are taking the opportunity, to increase their share of the shipping container marketplace. Historically, liner carriers have owned about 55 percent of the world's supply of shipping containers, with container leasing companies owning the remaining 45 percent. Nowadays, leasing companies are responsible for 65-70 percent of the new shipping container investments, and are also investing in additional units from shipping lines; who are in need of increasing their cash reserves.

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The current day shortage in shipping containers, due to a steadily rising worldwide demand, is a very good sign of economic prosperity, growth and expansion. In fact, recent forecasts of expected container shipping volumes, are predicting extremely attractive growth rates; beginning to take place in the next three to five years. Thus, looking forward to the strength of the industry in 2013-2014, the market is expected to be served by a carrier fleet with an approximate capacity of 19.3 million twenty-foot equivalent units (TEU); which is around 24 percent above today's fleet size.


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