Container Leasing : Seeking out the Opportunities

PRLog (Press Release) – Apr 18, 2007 – This Report offers a unique insight into the organisation, financial workings and business dynamics of the container leasing industry. Topics include:

World trade and equipment demand

The role of lessors
Development and future prospects
Lease contracts
Cost components
Revenue and profitability
Individual lessor profiles
Key information :
Growth in world containerised trade
Equipment demand
Direct ownership versus leasing
Trends in lease contracts

Cost components: equipment procurement, sales and administration, operations (M&R, refurbishment, depot/storage, repositioning)

Revenue and profitability: relationship with newbuild prices, use of surcharges, role of the secondary market, industry consolidation

Lessor profiles :

Future prospects: purchasing patterns, manufacturing trends, value-added services

The container leasing industry is facing some of its greatest challenges. The recent volatility in trade, ongoing structural changes in the liner shipping sector, continuing pressure on rental rates and uncertainty in the all-important secondary market have combined to depress revenues and raise costs. Nonetheless, Drewry Shipping Consultants' latest report, Container Leasing - Seeking out the Opportunities, reveals that it is not all doom and gloom.

Container Leasing - Seeking out the Opportunities explores all supply, demand, pricing and structural issues shaping the container rental business. It also takes a look at prospects for the next five years (up to end-2006).

Box demand :

Historically, lessors have provided close to 50% of the liner shipping industry's equipment needs, but this has slipped back towards the 40% level recently.

Growth in world container trade is expected to average between 6% and 7% a year over the coming decade and this will fuel the demand for new containers.

Highly competitive newbuild prices, the use of sophisticated IT/computer systems and membership of multi-trade/global alliances is helping to reduce carriers' box rental needs.  Box/slot ratios in the 2000s are likely to be tighter than those in the 1980s and 1990s.

Evolution and development :

The total pool of equipment operated by lessors amounts to about 7.2 million teu, but it actually declined in 2001.

Poor trading conditions in 2001 resulted in huge stockpiles of equipment building up in various depots, while the industry delayed taking delivery of many new containers. Lessors also removed thousands of boxes from their pools.

Lessors are increasingly looking at offering value-added services, while structured finance leases are definitely increasing in number.

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