Drewry: The number of global containers has fallen for the first time in 14 years

The ongoing Russia-Ukraine conflict, sharp increases in global energy and food prices, and rising inflation rates continue to negatively impact the container shipping industry. Trade forecasts for 2023 are further reduced. And as congestion in the supply chain eases, capacity equipment that has poured into the fleet over the past two years is being released. According to Drewry's recently released Container Equipment Forecast, the number of containers in service will fall by 3% by 2023, while the idle tonnage and scrap rate of shipping lines will also rise.

According to Drewry's latest assessment, these negative factors mean fewer containers are needed at a time when the fleet has an estimated surplus of more than 6m teu. This is due to the record number of new containers delivered in 2021, when shippers and shipping companies were unable to retire old containers due to congestion and therefore produced over 7 million teu of additional container equipment.

Aging containers are now being sold to the secondary market at a faster rate as shipping lines, especially shipowners, address overcapacity and bring them back in line with existing and short-term demand and ship capacity projections. Since the summer, there has been a significant increase in container equipment being suspended and returned to lessors because shipping lines have not renewed or extended contracts. This will last until 2023. Lessors are also affected by the shipping line's decision to own more equipment directly. Nearly 70% of dry cargo containers delivered so far this year have gone to shipping lines -- a reversal of the trend over the past decade when lessors dominated orders.

Inventories at China's container factories have risen to more than 750,000 teu by the end of September and are likely to rise further, so the appetite to order new containers is weak. Drewry predicts that production of container equipment will fall sharply in 2023 because few shippers are expected to expand their fleets and not every decommissioned container will be replaced by a new one. Globally, the amount of in-service equipment will fall from 50.8mteu in 2022 to 49.3mteu in 2023 and production will slide to an estimated 497,000 teu, only slightly higher than the post-financial crisis record in 2009. The global fleet is expected to fall by 3% next year, followed by a decline in container equipment, the first decline in 14 years.

After that, Drewry expects the market to rebound and annual production of new container equipment to return to the 4.4-5.2 mteu range by 2026, with replacement demand accounting for more than 50 percent of all annual production. The global container equipment pool is expected to begin expanding again after a 3% decline in fleet size in 2023.

Shenzhen Xunlaitong specializes in shipping export from Shenzhen to Australia & New Zealand, Germany, Netherlands and more business

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