21 February 2024 (Lloyd's List) - IMPROVING trade outlooks combined with a number of maritime chokepoints has boosted the outlook for container equipment manufacturing, according to the latest assessment of the sector by Drewry.

A late surge output in the final months of last year saw the container equipment fleet grow by 1% to 51.4m teu, and 2024 is likely to see another 2.3% growth.

The drivers for the increased production are both increased demand and decreased container productivity, said Drewry senior analyst John Fossey.

“The latter has worsened this year as a consequence of ongoing draught restrictions in the Panama Canal and ocean carriers rerouting ships from Suez Canal transits to round the Cape of Good Hope sailings, as a result of attacks on ships in the Red Sea by Houthi rebels,” he said.

“With containers spending longer on ships and taking more time to complete their journeys, sales into the secondary market have slowed and the stock of empty containers, especially in depots and factory yards in China, have been largely eroded.”

The combined impact of the two disruptions affects some 6m–7m teu of equipment capacity, he added.

Fortunately, manufacturers in China had cut prices last October and November after a year of slow demand for equipment that reflected the slowdown in volume demand during 2023.

“With prices for 20 ft containers falling to about $1,850 in some weeks, orders increased strongly with ocean carriers the main buyers,” Fossey said.

“The availability of capacity in the factories meant these containers were also being delivered very quickly.”

Drewry expects 2024 to be “significantly stronger” than 2023, with global container handling throughput forecast to increase by 2.3%. This compares with minimal growth in 2023.

It also projects that ocean carrier’s box-to-slot ratios will increase in the short term, as buffer stocks of equipment are increased to cope with the current supply chain challenges.