Drewry expects the global pool of shipping containers to contract in both 2023 and 2024. While stubbornly high levels of inflation in many countries is depressing demand, increasing geopolitical instability is affecting investor sentiment, with both factors depressing the growth prospects for world trade, sources Drewry.
Market Forecast
Drewry’s latest report on the container equipment market forecast that the box pool will decline by 2.6% this year, with a further contraction expected in 2024. The last time the container pool posted a YoY decline was at the time of the global financial crisis. Between 2008 and 2009, the total number of containers in service dropped from 27.9 mteu to 26.9 mteu, a decline of 3.7%.
The most serious oversupply of equipment is in the 40ft high-cube segment, because in late 2020 and throughout 2021, this was the type of box that was in greatest demand. In 2021, this size of container accounted for over 85% of all dry freight containers produced and this in a year of record production when in excess of 6.6 mteu were produced. The scale of oversupply means that any equilibrium for 40ft high-cube containers is unlikely to occur before 2025, unless of course there is a sharp turnaround in trade.
Box Purchasing Program
This year has seen both ocean carriers and leasing companies curtail their box purchasing programmes considerably, with these two groups unlikely to take delivery of more than 1.1 mteu of new containers in 2023. In 2024, Drewry expects a modest recovery to take place in their purchasing plans, largely based on more aging containers being replaced, and for this to increase more strongly in 2025. This is linked to the bulge in container production that took place between 2006 and 2008, when an estimated 9 mteu was produced. This equipment is now at the end or nearing the end of its trading life.
The recovery in container production anticipated from 2024 is based on both a modest recovery in trade, as well as the ongoing capture by container shipping of cargo from other sectors of the freight transport industry. Specifically, the containerized mode is expected to make further inroads into specialized reefer shipping and perishables sectors of the airfreight business, and to take some market share from ro-ro and break bulk vessels when it comes to moving project and out-of-gauge cargo. This will drive the demand for reefer and special dry freight containers, such as open-tops and flat tracks.
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Source: Drewry
