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Cheap Containers A Thing Of The Past?

Tuesday, 10th August 2010

Both new and used shipping container prices are nearing record levels. The main drivers behind this seem to be a lack of new production in China coupled with increased demand by the lines.

The shortage of skilled workers facing the container factories in China has been well documented. However the high prices the factories are demanding means many companies are sitting back, unwilling to place orders at such high levels. This waiting game however could mean some companies miss the boat, 8-12 week lead times will see any new orders not coming on stream until well into the fourth quarter of this year.

Many analysts have predicted weakening demand beginning in that period, some signs of a slowdown in the U.S and China are already evident. The second hand container market will no doubt continue to suffer from a lack of supply for some time to come. Leasing company new builds are in some cases going straight out from factory on leases for up to 8 years. The lines are still reluctant to dispose of any equipment while boxes are in short supply, repairing units that would normally be scrapped.Luckily for us at Bullmans we still hold a stock of containers available for sale at trade prices.

Demand from companies carrying out container conversions and from the self storage industry in London seems to be as buoyant as ever. The high cost of equipment however has to be passed on meaning hire rates are beginning to increase to compensate. With lease terms becoming more stringent and fewer and fewer containers returning to the U.K what little equipment is dropped off will often only be in the key port locations. Areas such as Essex should benefit from this being strategically placed in the Southeast which is covered by 3 ports. Outlying counties however will be faced with higher transport costs needing to truck boxes in from elsewhere.



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