Drewry - Global container ownership is expected to decline from 2023 to 2024, with trade pressure as

Introduction:

Drewry predicts that global container ownership will show a downward trend in both 2023 and 2024, due to sustained high inflation levels in many countries suppressing trade demand and geopolitical instability affecting investor confidence, both of which are suppressing the growth prospects of world trade.

Drewry predicts that global container ownership will show a downward trend in both 2023 and 2024, due to sustained high inflation levels in many countries suppressing trade demand and geopolitical instability affecting investor confidence, both of which are suppressing the growth prospects of world trade. In addition, shipping companies and container leasing companies are digesting the excess containers accumulated over the past two years.

Drewry predicts that container ownership will decrease by 2.6% this year and is expected to further decline in 2024. The last time the container ownership decreased year-on-year was during the 2008-2009 global financial crisis, when the total number of containers put into use decreased from 27.9 million TEUs to 26.9 million TEUs, a decrease of 3.7%.

The serious oversupply problem now mainly occurs in 40 foot high containers. In 2021, containers of this size accounted for a record breaking 85% of the total production of all dry cargo containers, with production exceeding 6.6 million TEUs. This phenomenon of box type oversupply is unlikely to ease before 2025 unless there is a sharp change in trade.

Figure 1 Global container ownership, production, growth rate, and substitution rate

Source: Quarterly Forecast of Container Equipment Q3 2023

This year, both shipping and leasing companies have significantly reduced their container procurement plans, with a total procurement plan expected to be within 1.1 million TEUs. In 2024, Drewry expects a moderate recovery in their procurement plan, mainly based on the replacement of more old containers, which will be even stronger in 2025. This is related to the surge in container production between 2006 and 2008, estimated to have produced approximately 9 million TEUs at that time. These devices are now nearing the end of their lifespan.

It is expected that container production will begin to recover after 2024, due to moderate trade growth and the continued acquisition of market share from other traditional transportation methods in the field of cargo transportation by container shipping. Specifically, the containerization model is expected to further expand in traditional refrigerated transportation and other fields, while gaining some market share from roll on/roll off ships and bulk cargo ships when transporting engineering goods and oversized goods. This will drive the demand for refrigerated containers and special dry cargo containers (such as open top boxes and flat containers). Drewry predicts that global container ownership will increase by 7% between 2023 and 2027.