Shippers should expect a container shortage to affect peak season this year, according to a report released Tuesday by the World Shipping Council.
According to the report, Container Supply Review
, a dearth of container manufacturing during the dark days of 2009 and early 2010 won't yet be overcome by increased production levels this year, as demand for containerized goods gradually improves.
Hurting matters is the employment by carriers of slow steaming, which increases container requirements on key longhaul trades.
'The global cargo demand for 2011 is projected to be about 11 percent above the 2008 levels,' the report said. 'Container production forecasts for 2011 at 3.5 million TEUs represent 26 percent more than the 2008 production, which is a significant growth but not enough in TEU terms to replace the container production lost in 2009 and 2010.'
The Washington, D.C.-based WSC said key indicators of potential supply shortage are the ratio of containers to total slots in the global containership fleet, and the ratio of container traffic to the container fleet.
'In 2003, the (container traffic-to container fleet) ratio crossed over the 5.0 mark, likely due to the unexpected surge in cargo volume,' the report said. 'Except for the recession year of 2009, it has remained over 5 since 2003. Increased demand in the short-haul intra-regional trades, like intra-Asia, would certainly contribute to carriers' ability to increase the number of TEUs moved for each TEU of container equipment.
'Perhaps most telling is that in 2010, when container shortages were clearly felt in various locations at certain times of the year, the traffic/fleet ratio reached a 20-year high of 5.54. While this is arguably positive from an asset utilization perspective, we know that, at this ratio, equipment shortages did exist.'
The WSC report projects a shortage to hit peak season this year, but to ease in 2012.
'Based on current forecasts, the 2011 traffic/fleet ratio is expected to be higher than 2010,' the report said. 'This suggests that container shortages in some locations, and particularly during peak volume periods, are likely in 2011. By comparison, if one applied the 2008 ratio of 5.29 to the projected cargo demand for 2011, it would project a required container fleet of 31.304 million TEUs, or 1.82 million TEUs above the current 2011 projected container fleet size.'
The report also said, based on analysis by SeaIntel, that slow steaming requires carriers to employ roughly 10 percent more containers than if a service wasn't slow steaming. The impact is lessened on longer voyages, like between Asia and Europe, which require more containers regardless of whether slow steaming is used.
Steven Blust, president of the Institute of International Container Lessors and a former Federal Maritime Commissioner, said the WSC study was very thorough, but that he was "unable to comment on the amount of equipment required to meet cargo needs as this is a service matter that is best handled between ocean carriers and their customers.
"However, I can tell you that container-leasing companies have committed significant resources over the years for the acquisition of new containers that are then leased to ocean carriers and other parties for use in their services, and the lessors are prepared to continue to do so in the future to support international trade." ' Eric Johnson