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The global pool of shipping containers is expected to expand by 2.3% this year, according to Drewry
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Rising trade prospects and slowing box productivity are spurring growth in the global pool of containers, with disruptions in the Red Sea and Panama Canal lengthening voyage transit times
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The stock of empty containers, especially in depots and factory yards in China, have largely eroded
The global pool of shipping containers is expected to rise 2.3% this year, according to the latest analysis from Drewry.
In its recently published Container Equipment Forecaster report, Drewry said rising trade prospects and slowing box productivity are spurring growth in the global pool of containers, with disruptions in the Red Sea and Panama Canal lengthening voyage transit times.
The last few months of 2023 saw inventories boosted following a pickup in newbuild output, which had previously recorded declines. The global box fleet was expected to have risen by 1% to 5.14 million TEUs in 2023.
The lower levels of box productivity coupled with slightly higher growth rates in trade were key drivers on Drewry’s new projections.
Box production had actually gone down this year due to draught restrictions in the Panama Canal. Also, ocean carriers were rerouting ships from Suez Canal transits to round the Cape of Good Hope sailings made necessary by attacks by Houthi rebels on ships in the Red Sea.
Stocks of empty containers – notably in factory yards and depots in China – have diminished as containers spend more time on ships and take more time to complete their journeys, according to Drewry. Sales into the secondary market, therefore, have also slowed as a result.
Geopolitical events have again exposed the vulnerabilities of the liner shipping industry. Two main arteries of the Red Sea and the Suez Canal have been on the forefront of today’s challenging times.
At the start of this year, the total of containership transits around the Cape of Good Hope rose to 605, from just 164 last year.
The number of voyages through the Suez Canal, meanwhile, sank to 62 in the same period, compared to the 328 in January of 2023.
Drewry’s AIS analytics said voyage delays caused by Cape diversion range from 10 days for ships heading to Northern European ports to 15 days for the Mediterranean.
The impact of disruption in the Panama Canal has not been as significant.
In the last quarter of 2023, factories in China slashed prices for new containers as they tried to raise sales in what was a most challenging year for manufacturers.
Prices for 20-foot containers fell to about $1,850 orders from ocean carriers rose substantially.
Drewry expects trading this year to be significantly stronger than last year. Box-to-slot ratios are expected to increase in the short term.
READ: Capacity oversupply to pull down freight rates, says Drewry
