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Prices for new containers softening, but congestion keeps supply tight
Source
American Shipper
Post Date
08/12/2022

The price of new ocean containers is falling, and while carriers had sufficient equipment available during the second quarter, port and landside congestion is keeping box supply tight, according to container lessor Textainer Holdings. Congestion slows the circulation of containers, the company noted Tuesday during a second-quarter earnings call. An estimated 12 to 14 percent of total ship capacity is currently tied up due to bottlenecks, labor shortages, and other pandemic-related disruptions, Textainer CEO Olivier Ghesquiere said during the call.

“The way we look at it is that the current congestion is very much a supply issue,” he said. “As we see for other elements in the economy with inflation, in particular, supply plays a very, very big role and even if demand is easing, those supply constraints remain in place. And in our case, what is really impacting congestion is really the inland logistics part of the overall supply constraints.” Textainer recorded leasing revenue of $203 million in Q2, a record for the company and up from $199 million in Q1 and $187 million year over year. Textainer’s fleet utilization is currently 99.5 percent, with only a small increase in redeliveries of older containers, which has helped the company see record gains on sales of $23 million for Q2, Ghesquiere said.

The price of new boxes continues to , still well above historical averages. To counter the cost, carriers are reducing the intake of new containers and holding onto existing units ahead of the peak season, Ghesquiere said. As a result, production of new units has slowed to about 300,000 TEU per month with shipping lines placing over 70 percent of recent orders. “Even if prices may have eased for 40-foot-high cube containers, they have strengthened in some parts of the world for 20-foot standard units, which we commonly sell for more than their original cost 14 or 15 years ago,” the CEO said.


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