Blog June 25, 2015

More tank containers, more scrapping – but more idling

By Nicola Byers

More money than ever is being invested in growing the global tank container fleet, and scrapping has ramped up by 500% since 2014 in an effort to stave off overcapacity. Nevertheless, the idled fleet is growing too, a sign that the already oversupplied marketplace is worsening. So says research from the International Tank Container Organisation’s (ITCO) annual tank container fleet survey 2015.

“Investment in the industry, measured by the estimated 48,200 tanks manufactured in 2014 and entering the tank container system, amounts to some $960m. Further investment is being made in other related areas, such as service provider infrastructure, information technology and – not least – the people that make the business tick,” Heike Clause, president of ITCO, said in her introduction to the survey, published in late May.

The global tank container fleet grew by 12.6% over the course of 2014, with the global fleet now totalling some 440,220 units. The results of the survey, however, may have been slightly skewed by the inclusion of 18 additional operators in this year’s survey, which includes 194 operators compared to 176 in the 2014 survey. (ITCO notes “possibly a further 50 or more operators exist”).

ITCO estimates that the number of tanks manufactured annually has almost doubled between 2013 and 2014. Some 39,700 new tanks were built in 2013, which increased to 42,620 last year and 48,200 this year.

Scrapping and disposal of tanks has increased dramatically, however, which has helped slow the net growth of the global tank fleet. Just 1,000 units were divested last year, compared with 5,000 units this year. Between 2013 and 2014, the global fleet posted net growth of 16.6% but disposal activity has helped stopper this, falling to 12.6% growth between 2014 and 2015.

Operators of tank container fleets have preferred to acquire units rather than lease them over the past year, the ITCO survey has found. The global fleet of tank containers owned by operators increased from 161,300 in 2014 to 194,160 this year – a 20% increase. The fleet leased by operators saw a more modest increase in size over the same period, growing by 8% from 103,250 units last year to 111,540 units in 2015.

The bad news is that the global fleet of tanks owned by lessors showed a more rapid increase in idle tanks this year – a symptom of dreaded overcapacity. There was 17% a year-on-year increase of idled tanks between 2013 and 2014. A year later, the idle fleet increased by 33%, growing from 17,650 units in 2014 to 23,400 units in 2015.

Lessors saw a steady year-on-year increase in units leased to operators between 2014 and 2015, growing 8% on last year to 111,540 units in 2015. Leasing demand from shippers (and other parties) was around the same; the number of units supplied by lessors to these companies also grew by 8%, from 55,600 tanks in 2014 to 60,060 this year.

“The tank container industry faces competition from other types of packaging and transport systems (including drums, flexitanks, parcel tankers and rail tank cars). Whereas safety, reliability and economy are major ‘selling points’ of the tank container, shippers also need to be sure that the industry can supply sufficient tanks to meet demand,” Clause notes in the survey.