Prices of dry freight shipping containers have doubled over the past year to reach historic highs but will moderate over the next few years, according Drewry’s recently published Container Census & Leasing Annual Review and Forecast 2021/22 report.
Dry box newbuild prices rallied strongly in 2020 from the lows of the prior year to reach their highest level since 2011 by the fourth quarter, with a YoY gain of 75%. Then by 2Q21 40ft high cube containers breached the $6,500 threshold, more than doubling over the year, to reach their highest value since Drewry started monitoring container equipment prices back as far as 1998.
“Pricing has been driven by soaring demand for newbuild containers as shipping lines and lessors have been seeking to rebuild fleets in the face of chronic equipment availability due to widening disruption across the container supply chain,” said John Fossey, Head of Container Equipment & Leasing Research at Drewry. “But also increased input costs, particularly for Corten steel and flooring materials have also played a part. We expect dry box prices to peak in the third quarter and to soften thereafter, easing further over subsequent years as trade normalises.”
In sharp contrast, reefer and tank container prices changed little over 2020, but rallied in the first six months of 2021, up 6.5% and 40% YoY, respectively, in 2Q21. Prices of these specialist container types have different cost drivers to dry containers and are expected to continue rising although at a moderate pace over the next few years.
Annualised newbuild dry, reefer and tank container prices
Newbuild container output has soared through the first six months of 2021, with China dry box output climbing 235% YoY to 3 million teu and reefer production more than doubling to 260,000. Drewry expects full-year production to reach 5.2 million teu, representing a 67% YoY rise. The main buyers of this equipment have been lessors, accounting for 68% of newbuild purchases. But Drewry expects carriers to invest more in their own container pools over the near term given their much improved levels of profitability.
Despite record newbuild output, insatiable demand for equipment raised utilisation of the leased fleet across all equipment types to over 99% by the second quarter of 2021, its highest level on record. This drove dry box LTL per diem rates to their highest level in 10 years, doubling over the year, bringing investment cash returns (ICRs) back to pre-pandemic levels.
“Looking ahead, dry box per diems are forecast to rally 65% in 2021, the steepest rise since Drewry started recording lease rates in 1990,” added Fossey. “This acceleration will outpace that of newbuild prices as the lagging effect means that lease rates will stay higher for longer, lifting ICRs further. But thereafter we expect some softening of returns.”
Marine Insight does not own the rights of the video.
Shipping News You Would Like:
The information contained in this website is for general information purposes only. While we endeavour to keep the information up to date and correct, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability or availability with respect to the website or the information, products, services, or related graphics contained on the website for any purpose. Any reliance you place on such information is therefore strictly at your own risk.
In no event will we be liable for any loss or damage including without limitation, indirect or consequential loss or damage, or any loss or damage whatsoever arising from loss of data or profits arising out of, or in connection with, the use of this website.
Latest Shipping News You Would Like:
Get the Latest Maritime News Delivered to Your Inbox!
Our free, fast, and fun newsletter on the global maritime industry, delivered everyday.