A RECENT study by consultancy Drewry shows that newbuild container output is collapsing, according to Australia's Daily Cargo News.
Behind this decline in container building is stagnating trade and a ballooning surplus of shipping containers, following easing of pandemic era supply chain constraints, the company said, adding that it forecasts newbuild container production to slump to its lowest level in 14 years.
The consultancy estimates that global box production contracted 71 per cent year on year to 306,000 TEU in the first quarter of 2023, the lowest level since the same period of 2010.
While some recovery is anticipated through the remainder of the year, full-year output is not expected to exceed 1.8 million TEU, the lowest level since the "recession-ravaged" year of 2009, according to Drewry's Container Equipment Forecaster.
Currently, several factories in China are either closed or operating on significantly reduced working hours, with full-scale production expected to commence in June.
Meanwhile, commercial production at two new plants in Vietnam is not expected to start before 3Q23 with output scaled back from original expectations.
The Hoa Phat Group factory in Cai Mep and the joint venture plant between Ace Engineering and Seojin Systems in Haiphong together will have the capacity to produce 600,000 TEU a year by 2026.
Meanwhile, this year has seen record returns of containers to leasing companies, while carriers have been busily disposing of ageing and surplus boxes in their owned fleets, according to the Drewry report.
Currently, the priority for most container owners is to adjust their equipment pools to better match current trading and vessel supply parameters, and to remove ageing or damaged boxes that have accumulated as a consequence of supply chain congestion over the period of the pandemic.
As a consequence, the global fleet of containers is forecast to contract 2 per cent this year to 49.9 million TEU, representing the first fall in 14 years.
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