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Talk that 20-TEU containers are on the way out is misplaced, Drewry says, as it expects production of the 20-ft standard box to increase in 2023
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On the contrary, the supply chain advisors says 20-ft container production has risen significantly with robust orders, particularly from ocean carriers
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Chinese manufacturers made nearly 500,000 units in January-August this year, up 64% year on year and 35% on the same period in 2020
Twenty-foot container production is expected to grow next year to keep their share of the global container fleet above 25% for the foreseeable future, belying talk that they are on the way out, Drewry says in a report.
Drewry said although the standard 20-ft dry freight container had seen its share of the global equipment pool decline over the past decade, its role in the fleet is secure.
The supply chain advisors said 20-ft container production increased significantly with robust orders, particularly from ocean carriers.
“This will come as some relief to many beneficial cargo owners (BCOs) concerned at the limited availability of 20-ft boxes over the past two years, which has led some to wonder if the equipment type might be on the way out,” Drewry said.
Nearly 500,000 TEU were made by Chinese manufacturers in January-August this year, up 64% year on year and 35% on the same period in 2020, accounting for over 96% of global output. Drewry expects full-year output for the full year to total at least 900,000 TEU, up from just below 560,000 TEU in 2021, the report said.
Data published by Drewry in July indicates more than 6 million TEUs of capacity in the global container fleet but about 75% of these are 40-ft boxes.
Transport operators including ocean carriers, and traders were responsible for an estimated 72% of deliveries made in January-August this year, for both replacement and expansion purposes.
Demand for new 20-ft boxes for non-trading purposes remains robust as companies in the static storage business expand their operations and new players enter the business, the report said.
“While the sharp increase in the production of 20-ft containers this year is partly related to some under-ordering last year as lessors and ocean carriers focused their purchasing activities on 40-ft high cube containers where there was a global shortage, the demand factors for 20-ft containers remain sound,” Drewry said.
There are several industries where 20-ft containers are more appropriate to use due to the nature of cargo moved – heavy and dense – and where companies have built their supply chains around this type of equipment, the market tracker said.
Drewry said ocean carriers, in particular, need to ensure they have the inventory to satisfy these accounts, many of which are their long-time customers. Arguably, for lessors, the 20-ft box is less marketable and potentially faces longer off-hire periods. Takeup of this size of box is expected to decline.
Meanwhile, the demand for 20-ft containers in the non-maritime trading arena is strong and expanding and this will encourage traders to order more of these units.
Consequently, Drewry expects the 20-ft container’s share of the fleet to remain stable in the next five years with the unit making up at least 26% of standard dry containers in service. “Given the upside potential, this share will increase rather than decrease over the forecast period,” it said.
