Container Manufacturers See Volumes Drop
Wednesday, 19th August 2009
Shipping container manufacturers used to be widespread throughout the world. Traditionally ISO freight containers were built in many different locations such as South Africa, India, Poland, the Far East and even the U.K. These days the majority of shipping containers are built in China as other locations struggled to compete with the cheap labour prices there.
Over the last 10 years the container factories in China have seen a boom with many companies taking advantage of cheap containers and even cheaper finance. Freight volumes had been very high and worldwide container demand grew at a fast rate. The recent global credit crisis however has seen the availability of credit dry up and consumer demand has weakened considerably. The cost of fuel has led to the price of containers increasing as has the exchange rate. Towards the end of the boom the Chinese factories also increased the price of new build containers citing steel and production costs as the cause. Even though they are now faced with empty order books, and factory yards stacked high with containers not yet sold, the factories are reluctant to reduce the prices.
Demand for new containers looks set to remain weak for months to come and the few companies that may consider new production lines are holding back and waiting for the factories to reduce their price.