The head of the world's largest container leasing company said Wednesday he expects shipping companies to start adding containers to their fleets next year, with many relying heavily on leasing companies for new equipment.
John Maccarone, president and chief executive officer of Textainer Group Holdings, said Wednesday that about 3.5 million containers will be added to the world fleet this year compared to 2.4 million in 2010. According to figures from Nomura Securities, in 2009 there was a 4 percent decline in the world container fleet as more containers were retired than added to the fleet, he said.
Maccarone, who spoke at a shipping conference in New York organized by the investment banking house Jefferies, said while the supply has about matched demand for containers in 2011, that is partly because shipping lines have been holding onto boxes longer than they normally do.
"Eventually as these older containers begin to cost them a lot more in maintenance and repair, we will see a fleet renewal program. My personal feeling is that by the end of this year or the beginning of next year many shipping lines will begin a significant program of getting rid of their very old containers and leasing or buying, but most likely leasing a large portion," he said.
Some shipping companies are capital constrained because they are "back into a loss making position," he noted.
Leasing companies today own 44.5 percent of the 30.6 million TEUs of containers, but he said leasing companies provided 65 percent of new production in 2010 and are forecast to supply 60 percent this year.
Textainer had first half revenue of $196.9 million, 37 percent more than in the first half of 2010. Maccarone predicted his company will have its best year ever in 2011, and 2012 and 2013 will also be good for his company, which has a fleet of 2.4 million TEUs, he added.
Leasing companies are also seeing an uptick in demand because of slow steaming, which Maccarone said requires companies to have 5 percent to 7 percent more containers for the same cargo volumes.
Shipping companies have become so efficient in the use of boxes -- reducing the ratio of containers to slots on their ships from 2-to-1 in 2000 to 3-to-1 in 2011 -- that "we don't think it can go any lower, there isn't any more efficiency to be gained by shipping lines," he said.
"Contrary to many of the comments that you have undoubtedly heard at this conference about the shipping industry, the container leasing industry is doing incredibly well," he said. ' Chris Dupin