Triton Containers Has Massive Demand for Shipping Equipment
As previously reported by FreightWaves, a very small number of major builders in China manufacture containers. Those producers are reportedly sold out until at least February.
John O’Callaghan, Triton’s head of global marketing and operations, confirmed on the call that container “factory capacity [is] fully booked” through 2020.
Sondey said the unexpected spike in demand has prompted China’s box builders to ramp up their output — which had fallen below normal levels pre-coronavirus. “Container manufacturers have started to increase their production by adding hours. Production is getting back to a normal levels,” he explained.
“Given the fact that our inventory and the market inventory is so low, we have been ordering more than we might typically for next-year production at this point,” he continued. Triton has already placed $350 million of new container orders for 2021 delivery.
Shipping Crate and Box Prices Rise
New container prices have risen to $2,500 per cost equivalent unit (CEU), said O’Callaghan. (CEU expresses the value of a container as a multiple of a 20-foot dry cargo unit.)
Fully booked Q4 2020 factory capacity “helps explain why box prices have increased rapidly over a short amount of time,” O’Callaghan added. Earlier this year, prices were around $1,800/CEU, putting the year-to-date increase at almost 40%.
Equipment lessors are also securing much higher leasing rates from carrier customers. “For sure, lease rates are up significantly over the last few months,” confirmed Sondey. “That reflects increased new container prices together with the strength of demand and the scarcity value for containers. Market leasing rates for new containers are up well over 50% compared to where they were during the second quarter.”
At Asia container depots, inventory has collapsed and the pick-up activity has skyrocketed past drop-off activity. These trends are specifically driven by “extreme demand” for 40-foot-high dry cube containers, which are “consumer-oriented, Asia-U.S. primarily and also Asia-Europe,” said Sondey.
About Triton Containers
Triton Container Sales (TCS) sells a full line of new and used shipping container products. With a lease fleet of 6.0 million twenty-foot equivalents (“TEU”) of containers, we offer a robust supply of containers for sale around the world in the locations where you need them most.
We can offer used shipping containers in “AS IS” condition or repaired to a “cargo-worthy” export standard. As many ocean carriers have slightly different standards on “cargo-worthy” acceptance criteria, our Triton Container Sales staff will be happy to refer you to an experienced third party surveyor in the port location of your container purchase.
For new containers, we can arrange direct delivery to your location from our factories in Asia through carefully managed “one-way” lease agreements with our best in class ocean carrier customer base. One-way leases enable us to defray the cost of shipping empty containers and allow you a more competitive price on your order.
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