WorldCargo
REEFER INDUSTRY
news
Reefer lessors face up to the credit crunch
T
he refrigerated container
sector has not escaped the
Reefer container lessors face in-
Table 1: Breakdown of annual deliveries of integral reefer containers made to leasing companies
and all owners 2004-2008 (figures in rounded TEU)
downturn currently af-
creasingly tough times, with many
Year of Leased fleet Leased fleet Leased total World total Leased share of
fecting the wider container indus-
try as it too is being impacted by
more competitors active today than
Purchase additions replacements delivery delivery total delivery (%)
2008 12,500 54,500 67,000 207,500 32.3
the credit shortfall and deepening
world recession. However, as re- two years ago. But despite the wors-
2007 42,500 33,500 76,000 224,000 33.9
2006 7,500 43,000 50,500 176,000 28.7
frigerated container trades have so
far suffered to a slightly lesser de-
ening credit shortage, further invest-
2005 17,000 19,000 36,000 170,000 21.2
2004 20,500 19,500 40,000 148,000 27.0
gree than their dry freight coun-
terparts, the outlook for reefer les-
ment is planned for 2009
Source: Manufacturer and leasing company data
sors is less bleak and already companies amongst the most im- chilled products, which are more
Table 2: Breakdown of fleet of integral reefer containers on operating lease by size for 2004-2008
prompting some forward invest- portant buyers. “recession-proof” than dry freight
and comparison with total reefer fleet (figures in rounded TEU)
ment into 2009. It is apparent nev- Further leasing company orders consumables. The old adage that
Year 20ft 40ft 40ft HC Total Global Total
ertheless that only those lessors have already been placed for the “people still have to eat” is just as end reefer reefer reefer reefer reefer leased
with the strongest financial back- first quarter when several thousand relevant today and contrasts with
leased leased leased leased fleet* share (%)
ing or deepest pockets will be able reefers booked at the end of 2008 their ability to cut-back retail ex-
2008 40,000 14,000 416,000 470,000 1,650,000 28.5
to compete effectively. are also due to be delivered. Fac- penditure elsewhere. 2007 41,500 18,000 398,000 457,500 1,520,000 30.1
Expenditure this year is cer- tory space is understood to be Furthermore, the ocean ship-
2006 45,000 24,000 346,000 415,000 1,374,000 30.2
tain to be well down on the leas- largely booked through February ment of perishable commodities
2005 49,500 36,000 322,000 407,500 1,280,000 31.8
ing industry’s record reefer pur- and, even though this differs from is continuing to grow at the ex-
2004 51,000 40,500 299,000 390,500 1,164,000 33.5
chasing in 2007 and 2008, al- the lengthier order backlog of last pense of airfreight – in part due
Source: Ibid
though the total could still be year, it is indicative of some for- to increasing environmental pres-
greater than that predicted for the ward activity. sure - even though the recent ices are phased out due to high driven down relentlessly by lead- never accounted for a delivery
dry freight sector. In contrast to sharp fall in energy cost has par- operating and vessel replacement ing containership operators, much greater than 50,000TEU in
the recent wholesale shutdown of Greater resilience tially nullified this trend. costs, with the current constrained headed by Maersk Line, CMA any single year.
standard box plants, some reefer The greater resilience of reefer Container use is, meanwhile, economic climate expected to CGM, APL, MSC and Hamburg Lessors’ purchasing volumes
production was maintained up to demand is largely due to the car- gaining further ground as conven- accelerate this shift. The average Sud, which have all greatly ex- may have dropped in 2008, but so
the end of 2008 with leasing riage of foodstuffs and primary tional/palletised reefership serv- cost per reefer slot has already been panded their reefer handling ca- did global production, which was
pabilities in recent years. almost 10% down on 2007 and
amounted to 207,500 TEU
Struggling to keep up (107,000 units) for that year. For
Reefer container demand has the record, world output in 2008
been growing robustly for some amounted to around 6500 x 20ft
time, averaging more than 9% per and 100,500 x 40ft high cube, as
annum globally during the past compared with 11,000 x 20ft,
five years, although the leasing sec- 2000 x 40ft “standard” (8ft 6in
Cronos Reefers Global support
tor’s share has had difficulty keep- high) and 104,500 x 40ft high
ing pace and has barely managed cube reefers produced during
an annual compounded fleet 2007. The global reefer TEU fleet,
growth of 5%. accordingly, grew in size by 10.5%
This loss of ground occurred in 2007 and 8.5% in 2008. The
because of shipping companies’ leased portion expanded by a simi-
own aggressive procurement strat- lar 10% during 2007, but managed
All o
egies, which were fuelled by five only 2.7% in 2008 as equipment
years of strong financial perform- disposal increased sharply
ance and resulted in them taking throughout that year.
over 70% of all maritime reefers
produced since 2003. New entrants
Shipping lines have tradition- The boom year of 2007 had the
• MGSS outer cladding
ally favoured reefer ownership inevitable consequence of attract-
over leasing and have increased ing several new entrants into the
their share of the global fleet to market, all of which actively ex-
above 70% in recent years. This panded during 2008. The creation
amounted to 1,180,000 TEU by of four major new reefer leasing
ver the w
the end of 2008 and compared divisions late in 2007 by three
with just 470,000 TEU on oper- existing names - Textainer, CAI
ating lease. and Capital Intermodal - and the
In consequence, leasing com- formation of Beacon Intermodal
• Carrier and
Thermo King
panies own less than one of every Leasing was accompanied by other
machinery
three reefer TEU in the current smaller start-ups, including Sea
with long-term
fleet, while accounting for a simi- Axis. These were balanced against
warranties lar proportion of recent output. the merger in late 2007 of Car-
This was even the case in lisle Leasing and Interpool into
2007-08, when leasing company Seacastle Container Leasing to
investment rose sharply and over- create the largest reefer leasing
shadowed anything achieved be- group in the world and the lat-
fore. A new record was set in 2007, ter’s subsequent management
when lessors took 76,000 TEU takeover of reefer equipment from
• Corrugated sub-floor
with three-coat paint
out of a global total of Magnum Lease early in 2008.
system
224,000TEU (over 40,000 units As a result, the total number
• Micro-processor
from a total of 117,500) and was of major players in the reefer leas-
with dehumidification
followed by another impressive ing market jumped from seven at
control and USDA purchase of 67,000 TEU (34,250 the end of 2006 to 12 today, with
units) during 2008. The 2008 de- none of these solely dependent on
livery comprised 3500 x 20ft and the reefer sector.
o 31,750 x 40ft high cube reefers Beacon has emerged as one of
and compared with 5,500 x 20ft the best financed of the new
• A robust and corrosion-resistant
and 35,250 x 40ft high cube sup- competitors as it is backed ulti-
r
design with construction materials
plied to leasing firms in 2007. Pre- mately by the Bank of Tokyo-
viously, the leasing sector had Mitsubishi, which provides a
l
to suit customer requirements
Table 3: Reefer container lessors by size of operating fleet (TEU)*
d
• Maximum allowable cargo capacity
Company End 2008 End 2007 End 2006
Cronos Reefers are fitted with
Seacastle CL 125,000 150,000 -
Antwerp
• Long term warranties – up to 5 years
scuff plates
Carlisle Leasing - - 130,500
Dubai
Interpool - - 9,000
Genoa
Magnum Lease - 3,500 1,800
Gothenburg
• Available in 20', 40' and 40' HiCube
GE SeaCo 120,00 115,000 105,000
Hamburg TAL International 58,000 54,000 52,000
Hong Kong
• Global service support in all major
Triton Container 58,000 56,500 50,500
Lisbon Florens Group 41,000 40,500 30,000
London
port locations
Cronos Group 30,000 23,500 19,000
Madras
Capital Intermodal 10,000 2,000 -
New York
Textainer 6,000 1,600 -
Rio de Janeiro
• Available for master, operational
Beacon Intermodal 6,000 200 -
San Francisco and term lease or sale
Seoul
CAI 4,500 800 -
Shanghai
UES International 2,600 2,250 500
Singapore
Sea Axis 600 - -
Sydney
Other 8,300 7,650 7,700
Taipei
Contact your local Cronos office or visit
www.cronos.com
Total 470,000 457,500 415,000
Tokyo
*Excludes equipment on finance lease
Source: Leasing company data
32 January 2009
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