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Box Shortage on The Horizon

Thursday, 17th December 2009
Many shipping lines have cancelled routes into Europe as imports and demand dwindle in an effort to reduce overheads. However the export market has continued leading to an imbalance for lines equipment. This in turn has led to an upsurge in on hires by the lines, of leasing company equipment. Leasing companies over the years have sought to restrict the number of containers returned to the U.K by including huge drop off charges into new leases and incentives elsewhere. What little stocks that do build up are designated for sale or leased fairly quickly. Another factor that will have a more global effect is the low volumes of new shipping containers being built. Over the last few boom years lines and leasing companies have taken advantage of the upsurge in world trade, coupled with cheap and easy finance to build huge amounts of equipment. Following the worldwide economic crisis all but a few orders have been cancelled and no new orders placed. Demand is increasing though and with no new containers to be put straight into service the leasing companies will no doubt reap the benefit. Shipping lines will be reluctant to spend on containers when most of the big players have huge vessel orders coming on stream next year. The deposits have been paid and the balances are due to be settled. While some are simply walking away many of the large shipbuilders are holding firm. The lines conversion from using their own equipment wherever possible to leasing a large percentage of their fleets once again will see many sale stocks diminish and emphasis placed on repair rather than sale.

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