2018 has been a record year for container production, essentially all of which is done in China. 2016’s failure to accurately predict demand increase in 2017 and continued strong demand for containers has led to record container production throughout the year. Factories have pumped out over 4 million TEU in 2018. If you want a record setting box for yourself, ask us about “One-Trip” containers for your piece of the 2018 vintage. They’re like new and ready to go.
Job Security for Containers
Hand in hand with the record production has come a lower volume of offhires (retired containers). The combination has prevented a container shortage in the cargo industry, but has meant less volume available for domestic sale in the United States. We may have to fight for them a little more, but we still have a wide selection of great boxes. Check out what we have available for sale now or get a quote.
The Biggest Gets Bigger
With their acquisition of Hamburg Süd, Maersk becomes the largest ship line in the world… well, they already were, but now they’re even bigger. It was a fairly simple transaction with a mere 20,000 documents… for the due diligence process alone. A quick 3.7 Billion Euros later and the ship line now manages a capacity of 4.15 million TEU accounting for over 19% of global fleet capacity with a fleet of over 750 vessels. By the way, we sell Maersk containers. If you want some, come and get ‘em! Really though, we generally do not deliver this specific equipment, but if you can pick them up
Finding required trucking has become increasingly difficult and domestic shippers have begun looking to rail as an alternative. This is generally a viable option, but has come with its own challenges. Congestion, rapid growth, delays, and customer service challenges have kept rail from capturing the market share expected in the midst of the trucking shortage. All this has led to trucking rates that are increasing by double digit percentages year over year.
Day One for ONE
2018 saw more mergers in the carrier industry as Ocean Network Express (ONE) began operations in April. ONE was formed by the merger of Mitsui OSK Lines, Nippon Yusen Kaisha (NYK) and Kawasaki Kisen Kaisha (K Line) continuing the trend of consolidation within the industry. This makes ONE the sixth largest container line in the world serving over 200 ports worldwide. Their entrance to the market has been far from subtle with their ambitious goals of innovation and bright magenta containers/ships.
Trump Tariff Tornado
Trump’s tariffs are the talk of the town. This is definitely a space to watch over the next year as it has potential for significant industry impact. Tariffs have had measurable impact on the specific tariff segments (steel imports to the US from China are down 53% YoY since the effective date of the steel tariff), but the demand for international shipping remains strong. This is evidenced by the carrier cargo rate increases by Maersk, Hapag-Lloyd, and others. For now, it appears container movement will remain strong, but how “Destination: United States” will be impacted is yet to be determined. We will be watching this space.
We would like to sincerely wish all a safe and joyous holiday season and a Happy New Year. Here’s to another great year. Cheers!