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shipping container investment

2017 saw container prices, lease rates, shipping stocks rise

January 10, 2018 12:05 am Published by

The container shipping industry went through a significant downturn in 2015 and 2016 as global trade growth slowed at a time when there were too many ships and too much debt. The situation saw some improvement when Hanjin Shipping failed and  helped drain some of the industry's excess capacity. This, as well as an uptick in global trade, caused shipping rates to rebound in 2017; which helped drive up container prices and lease rates.

Look back at the container leasing industry in 2017, an epic run for shipping stocks has provided the momentum needed to climb even higher in 2018. CAI International led the way with an unbelievable 226.6 percent rise, followed by a strong 188.6 percent gain for Textainer Group Holdings Limited, and a 137 percent surge from Triton International.

Container companies have taken advantage of low container prices to improve their fleet. Thus far, they have secured excellent returns on these investments, which are expected to flow to their bottom line in the coming quarters.

For the year to date, we have committed investment in containers of $470 million, virtually all of which are subject to long-term leases with an average lease duration of over 8 years.- CEO, CAI International
 

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