The strong fleet increase of 2011-12 was evenly balanced between the two years, even though it did experience some fluctuation. Fleet expansion was unprecedented for the opening six months of 2011, when demand and pricing remained high, but subsequently slowed throughout the closing part of the year. This was due to a build-up of newbuild stocks, which subsequently curtailed further investment.

A similar pattern developed in 2012, when growth was again stronger in the opening half of the year than during the closing months. However, the opposite happened in 2010 (when the leased fleet also grew robustly, by 9 percent). Andrew Foxcroft, editor of the report stated: "Fleet expansion was slow during the opening part of that year, before surging strongly throughout the latter half as demand went into overdrive and equipment was in increasingly short supply. The current year [2013] may see a smaller overall increase, but uptake has so far been more uniform. As such, the lessors' fleet growth for the first half of 2013 is expected to be matched in the second half, although there has been another ominous pile-up of surplus equipment at factories across China".

By April 2013, this amounted to more than one million TEU globally, including 800,000 TEU of leased equipment. The latter figure topped the lessors' earlier over-supply (of 700,000 TEU) in 2011, and compared even less favourably with the 400,000 TEU averaged throughout 2012.

The current stockpile is expected to decline, as some peak-season demand develops during the third quarter, but its presence is almost certain to dent fleet expansion for the year overall and goes some way to explain the weaker annual rate now being forecast. It has also had a negative impact on new standard box prices, which had still to surpass their end-year level by the start of the third quarter. In consequence, there has not been the usual second-quarter surge in prices, which marked 2012, 2010 and many earlier years. Inevitably, lease rates have also been adversely affected, together with initial cash investment returns (ICIRs), which have tumbled to another all-time low.

Foxcroft said: "Nevertheless, the box lease industry still remains generally better placed than it was prior to the downturn in 2009. Before this watershed year, leasing companies had been losing out to the shipping industry's own aggressive box procurement programme, which resulted in a relatively weak and erratic growth rate for the rental fleet and steady loss in terms of its ownership share."

Source: Drewry