- CAI International Invests $1.35 Billion in New Containers Amid Red Sea Crisis.
- Mitsubishi HC Capital Fuels Container Demand with Major CAI Investment.
- CAI to Add 700,000 Containers, Addressing Supply Shortage from Middle East Tensions.
US-based container lessor, CAI International, declared an investment of $1.35 billion to buy 700,000 new containers. The company expects the necessity to rise due to the Red Sea crisis, which left enough unserved shortage in the containers, reports The Load Star.
Import Impact On Inventory
The owner of CAI, Mitsubishi HC Capital, will fund the investment; the amount will represent 20% of CAI’s current inventory. More to the point, one-tenth of the new containers will be reefers, which meets the diversity of shipping needs.
Reason for the Investment
As a Mitsubishi HC spokesperson pointed out, the increased demand is mostly due to heightened tensions in the Middle East that made containerships detour away from the Red Sea and the Suez Canal. It actually created a growing urgency for more container capacity.
Production Information
The investment will be substantial, but the spokesperson did not reveal the manufacturing locations of the new containers.
Consistency with the Business Model
It goes hand in hand with the overall business strategy of Mitsubishi HC. The latter’s strategy was recently unveiled in May. The strategy posted requires investing in the container leasing sector to a higher degree as well, especially keeping in mind the containers that cannot be let across due to the Red Sea crisis and also with restricted transits through the Panama Canal.
Market Trends and Container Prices
Container prices spiked at the start of the Red Sea crisis and have since corrected with the end of the peak season, a recent report from Container xChange said. The report also cited typhoons in East Asia that disabled container operations at key Chinese ports as one of the factors that sent prices plunging by 25% compared to last year, easing off from September’s $3,012 to $2,525 in the previous month, when it had peaked at $2,603 in July.
Background on CAI and Latest Developments
Mitsubishi HC bought CAI International in January of 2023 for $1.1 billion and merged the company with another container leasing subsidiary of the financier, Beacon Intermodal Leasing. The merger created the world’s third-largest container lessor, boasting a total capacity of 3.24 million twenty-foot equivalent units, or TEU.
Industry Prospects
According to Drewry, a UK consultancy, global container manufacturing is expected to reach 5.79 million TEU this year, its second-highest output on record. CIMC, Dong Fang and Singamas are some of the major manufacturers that have reported high-order volumes, largely prompted by the challenges the Red Sea crisis has been causing.
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Source: The Load Star
