Drewry estimates 6m teu of surplus containers now exist in the global equipment pool, which is large by historic standards. But with vessel slot capacity expected to increase by 3.6m teu in 2023 and 3.9m teu in 2024, much of the surplus is expected to be absorbed

By Will Waters

Container shipping’s equipment surplus is manageable and will recede, according to container shipping analyst Drewry, which estimates that as many as 6m teu of surplus containers now exist in the global equipment pool.

While large by historic standards, Drewry “considers this surplus to be manageable for the industry”, the analyst said in its recently published Container Census & Leasing Annual Review & Forecast 2022/23 report.

According to Drewry, the global pool of shipping containers increased by 13% to almost 50m teu in 2021, which was three times prior growth trend. “This reflected lessors and ocean carriers ordering a record number of containers, while retiring fewer ageing units, as congestion across global supply chains meant containers were an estimated 15% to 20% less productive than in pre-Covid-19 times,” according to Drewry.

Drewry estimates that each container averaged 18.1 lifts in 2021 compared with 19.2 in 2020 and between 19.5 and 20.6 in the 2010s. Moreover, the number of containers per slot of vessel capacity increased by 8% in 2020 when the pandemic started and remained at this level throughout 2021.

Drewry’s head of container equipment research John Fossey commented: “The delivery schedule of new ships is very strong with slot capacity expected to increase by 3.6m teu in 2023 and by over 3.9m teu in 2024. With new IMO emissions regulations coming into force in January 2023 forcing some ships to sail slower, much of the surplus equipment currently in service is expected to be absorbed.

“In addition, there is evidence to suggest that some carriers are planning to have more buffer stock in their equipment pools, while fewer new containers will be built in the next two years.”

Drewry forecasts that output in 2022 and 2023 will be much lower than last year, at 3.9m teu and 2.4m teu respectively, with replacement accounting for most of the orders.

“While newbuild and second-hand prices will fall, a return to the very low prices of 2019 is not anticipated as manufacturers are expected to manage their capacity and pricing strategies very carefully,” Drewry observed. “Meanwhile, the secondary market remains robust and the uses to which ex-trading containers can be put to use continues to expand.”

Fossey added: Looking ahead, ocean carriers will be the main buyers of equipment over the next two years with lessors then taking control again, raising their share of the pool to 54% by 2026. “Moreover, per diem rates and investment cash returns will general be higher over the forecast period than in the past five years.”

Container Equipment Census and Leasing 2022-23

Drewry’s annual review of the container equipment and leasing industry is based on a global census of fleet owners and a diverse range of forecasts unique to Drewry. It provides a level of detailed analysis and expert commentary not found elsewhere and is also available as an annual subscription package with the Container Equipment Forecaster which provides quarterly market updates as well as our latest forecasts.