The shipping container industry is finding some good news after two years of rough times as a result of the worldwide recession. 2009 was a very bad year for shipping companies as goods nearly stopped and inventories stayed on shelves with a total loss of consumption by consumers and business. The industry rebounded in 2010, but the percentage increases reflected how bad 2009 was versus how good 2010 was for the industry.
The demand for manufactured goods has increased around the world. Therefore, shipping companies are enjoying an increase in activity. They are enjoying rising profits and rising stock prices. A rise in manufactured goods is also on the rise because dry-bulk and tanker operates are seeing declines because of fallen demand. This segment has seen slower activity and the high supply of ships is driving prices down. There is not enough demand right now to match supply.
Early predictions are showing a eight percent increase in 2011 for the transport of manufactured goods in portable storage containers. Shares of Maersk have gained 80% in two years. There is also some predictions of IPOs and more growth in shares for the rest of the shipping segment of the industry. The dry-bulk and tanker side is not looking as good. They are slowing because China has slowed its consumption of metals, soybeans, energy and other raw materials. The country has been gorwing too fast and the government is looking to control to reign in the growth. When this happens, demand for raw materials decreases. Most notably, iron ore prices have declined the most as inventory is cutting into new orders.
Surplus is Hurting Fleets
Another factor hurting the tanker and dry-bulk sector is they ordered too many new ships in 2007 and 2008, right before the recession. Again, this points to the issue of high supply and low demand. As the demand and activity goes up for storage containers, their availability and pricing will change depending on where these shipping units are going.