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CONTAINER INDUSTRY
WorldCargo
news
Papering over the cracks
becoming significant, the fact that 80% cally and through acquisitions. “We believe
of Textainer’s redeliveries to date have this downturn will create significant op-
been in Asia, where the demand will be portunity for industry consolidation for
when market conditions improve, should companies like Textainer with significant
help mitigate empty repositioning costs financial flexibility as smaller, less capital-
If the performance of its biggest partici-
pant is the best barometer of the overall
The world’s biggest container lessor has
that might otherwise have been incurred. ised competitors are becoming increasingly
The biggest risk in 2009, Maccarone affected by market downturns.
health of an industry, then Textainer’s 2008
announced record results for 2008, but
said, is the possibility of a major shipping “The company intends to actively seek
results suggest that the container leasing
sector is in pretty good shape despite the
warns that 2009 will be an altogether dif-
line failing as a result of lower revenue from accretive acquisition opportunities in the
reduced freight rates. To date, there have months ahead,” he said.
global economic downturn.
“2008 was Textainer’s best year in al- ferent year for the leasing sector
been four bankruptcies and defaults among Another possible area for growth is the
Textainer’s smaller customers, accounting sale and leaseback of customer-owned con-
most every area of its business,” said presi- for around 1% of the company’s fleet, and tainers, which can be attractive to custom-
dent and CEO John Maccarone in open- could fall to around the 85% mark, ther to buy or lease new containers. more bankruptcies among smaller custom- ers as they free up cash for other capital
ing the company’s 2008 results conference Maccarone noted that many shipping lines “In fact I can see a scenario whereby ers, as well as demands for rental rate dis- needs, such as vessel financing. “These sale
call and webcast. “In addition to generat- are currently finding it difficult to access lines will find that they got rid of too counts, are expected. and leaseback transactions,” said Maccarone,
ing record net income…we secured debt financing and it is possible that they many containers and must start to on- But the challenges facing the leasing “are expected to enable Textainer to buy
212,000 TEU of long term lease will conclude in 2009, as they did in 2008, hire again as they did during the last cy- industry this year could also present op- attractively priced containers from custom-
originations, maintained high utilisation of that it will be more cost-effective to ex- clical downturn,” Maccarone said. portunities, Maccarone added. Textainer’s ers and place them on leases for the re-
95%, sold 85,000 containers through our tend leases of in-fleet containers than ei- In addition, though storage costs are long term strategy is to grow both organi- mainder of their marine service lives.” a74
resale team, renewed and expanded our
debt facilities, significantly enhancing our
financial flexibility and increasing our avail-
able credit to US$680M, and successfully
entered the refrigerated container market.”
For the record, Textainer’s total rev-
enues for the year ended December 31,
2008 increased by US$21.3M, or 8%, to
US$227.1M, while net income, inclusive
of unrealised losses on interest rate swaps,
was US$85.2M, up 26% on the
US$67.7M earned in the prior year.
But these healthy full year figures tend
to paper over the cracks that started ap-
pearing in leasing company balance sheets
in the fourth quarter of 2008. Textainer’s
total revenue in the fourth quarter was
US$65.6M, down 7% on the US$70.6M
recorded in the prior year quarter, while
net income for the quarter, again inclusive
of unrealised losses on interest rate swaps,
was US$12.9M, down 14% year on year.
Better ways to
Challenging environment
And that situation looks set to continue,
at least for the first half of this year. “As
lift it, load it, grab it,
we enter 2009, we expect to find a more
challenging environment,” Maccarone
said. “Though we cannot predict the ex-
tent, timing or ramifications, Textainer
believes that the current downturn in the
stack it, rotate it, tip
world’s major economies and constraints
in the credit markets could cause con-
tainerised cargo volumes to slow or be-
come negative on some trade routes.” it, push it, pull it,
Citing the Economist, Maccarone said
China’s exports are expected to decline
6% in 2009 with a 19% decline in the
first quarter. Shipping lines have already
fix it........
taken several proactive measures to react
to this situation, including laying up ves-
sels. According to Paris-based consultants
AXS-Alphaliner, about 800,000 TEU, or
6.5% of the world’s containership capac-
ity, is currently in lay-up.
Not surprisingly, redeliveries of con-
tainers have increased significantly of late
and a notable decline in leaseouts has been
seen. “Textainer has been advised by some
of its customers that heavy redeliveries
are expected to continue at least through
March or April of 2009,” Maccarone said.
Though firm figures are not available,
anecdotal evidence suggests that up to 2M
TEU of idle shipping line and leasing com-
pany inventory is already stored at depots
in China alone, while around 450,000 TEU
of new production is awaiting delivery in
manufacturers’ yards. Textainer is rationing
remaining available storage space in some
locations and offering alternative redeliv-
ery points due to lack of storage space, pri-
marily in Asia and Europe, he said.
Manufacturing hiatus
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The situation could be worse, however.
Maccarone pointed out that there had It’s a fact. There are many different types of load as there are industries, ports and end users. Which means that every customer’s needs are special
been virtually no new container produc- – And special needs require specialised handling.
tion in the fourth quarter of 2008 and all
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around 3M TEU and retirements have
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growth in the world container fleet of – not the supplier.
around 1.8M TEU/year.
“In 2009, we expect new production The range covers diesel forklifts 6 to 60 tonnes, masted container handlers, reach stackers, sideloaders 3 to 45 tonnes (Electric 3 to 7,5 tonnes)
to be no more than 1.5M TEU and pos- as well as a complete range of terminal, distribution and RoRo tractors. This comprehensive range is fully supported by Cooper SH dedicated field
sibly less, while retirements could be at technicians providing specialised backup.
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nual net fleet growth of 1.8M TEU, it
could be zero in 2009,” Maccarone said.
All of which suggests that unless things Cooper Specialised Handling Limited. Holly Farm Business Park, Honiley, Kenilworth,
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Though he conceded that utilisation
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SPECIALISED HANDLING
February 2009 43
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