Drewry expects the global pool of shipping containers to contract for two consecutive years in both 2023 and 2024.
In a new analysis, the independent maritime research consultancy firm noted that while stubbornly high levels of inflation in many countries are depressing demand, increasing geopolitical instability is affecting investor sentiment, with both factors depressing the growth prospects for world trade.
Moreover, shipping lines and lessors, in particular, are ridding themselves of surplus boxes built up in the fleet over the past two years or so and not replacing equipment being sold into the secondary market.
"Drewry's latest report on the container equipment market forecasts that the box pool will decline by 2.6% this year, with a further contraction expected in 2024," it said.
Drewry noted that the last time the container pool posted a year-on-year (YoY) decline was at the time of the global financial crisis when between 2008 and 2009, the total number of containers in service dropped from 27.9 mteu to 26.9 mteu, a decline of 3.7%.
It added that the most serious oversupply of equipment is in the 40ft high-cube segment because in late 2020 and throughout 2021, this was the type of box that was in greatest demand.
In 2021, this size of container accounted for over 85% of all dry freight containers produced and this in a year of record production when in excess of 6.6 mteu were produced.
"The scale of oversupply means that any equilibrium for 40ft high-cube containers is unlikely to occur before 2025 unless, of course, there is a sharp turnaround in trade," Drewry said.
It went on to note in the report that this year has seen both ocean carriers and leasing companies curtail their box purchasing programmes considerably, with these two groups unlikely to take delivery of more than 1.1 mteu of new containers in 2023.
In 2024, Drewry expects a modest recovery to take place in their purchasing plans, largely based on more ageing containers being replaced, and for this to increase more strongly in 2025.
This is linked to the bulge in container production that took place between 2006 and 2008 when an estimated 9 mteu was produced.
Drewry said the recovery in container production anticipated from 2024 is based on both a modest recovery in trade, as well as the ongoing capture by container shipping of cargo from other sectors of the freight transport industry.
Specifically, the containerised mode is expected to make further inroads into specialised reefer shipping and perishables sectors of the airfreight business and to take some market share from ro-ro and breakbulk vessels when it comes to moving projects and out-of-gauge cargo.
"This will drive the demand for reefer and special dry freight containers, such as open-tops and flat racks," the independent maritime consultancy firm further said.
"By 2027, Drewry estimates that the global pool of containers will have increased 7% over the years from 2023," Drewry added.