Category Archives: World Trade

As the global economy grows, world trade and the shipping industry will play a vital role in the recovery of nations and international trade around the world.

global container shipping industry

Economic Growth Increases Demand For Shipping Containers

put investment money in shipping containers not mattressAs the stock market continues to have investors holding their breath, profits and consistent investment returns can still come from many different, less dour sources, like an investment in the global shipping industry; for example.  In my experience, every time economic growth increases, the demand for shipping containers rises alongside.  Investors must understand that when signals in the traditional markets turn dim, there is likely some underlying reasons for fluctuations.  Often, it may be climate related, labor management difficulties, litigation that removes focus from a company’s business goals, turnover on a Board of Directors; and a myriad other reasons. Sadly, the international shipping industry is a sector that is often overlooked, despite the fact that it is the main driving force behind worldwide economic growth and continued prosperity.

Coming as a surprise to some, shipping containers are one such investment vehicle found in the shipping industry that can offer steady returns for investors, even if only a small portion of the overall portfolio is dedicated to hard assets and alternative investments.  Wise investors know that shipping container demand is closely tied to gross domestic production (GDP) and thus the increase in demand for consumer and industrial goods triggers the inherent need for moving goods to market, from manufacturer to customer, by way of a well-established and dependable worldwide container shipping system. When imports or exports rise, this is an indication of improved economic activity. At the moment, demand for goods from Asia and the Mid-East has been increasing in Europe and the United States, signalling a steadily improving international economy.

People have a preconceived notion that shipping containers come in one or two sizes, along with a tanker car. That could not be further from the truth.  The different types of containers and the means to transport them are sundry, and some come in multiple sizes.  Nowadays, there is a container for (practically) every need. Shipping containers of one type can be used for durable goods, while another may be for textiles and soft goods.  Automobiles have specific container requirements, as do coffee beans and perishables. Regardless of their cargo though, an investment in shipping containers will allow investors to profit from world trade, and economic growth all over the world.

the demand for shipping containers is rising

The Global Cargo Container Fleet is Much Bigger Than You Think

A growing number of investors seeking a steady investment return, are asking themselves, “should I invest in shipping containers.”  The resounding answer is “Yes.” The global cargo container fleet is much bigger and much stronger than you might think. For example, there numerous leading shipping companies like China Shipping Container Lines, Hyundai Heavy Industries, the United Arab Shipping Company and Maersk, are having newer larger shipping vessels built to expand their fleets.  As a matter of fact, Maersk Line posted its largest profit ever, and is investing more than 3.8 Billion in new Triple E ships; the biggest cargo ships ever imagined. Ten of these mammoth vessels are currently in service, with ten more due any time this quarter, and more on order.  With this kind of strength, the global shipping container industry can relied upon to deliver some very profitable returns for investors, funded by the steady demand for their container and crude cargo.

Make no mistake. There are Shipping Industry “nay-sayers.” In April of 2013, Hellenic News reported there were too many ships in the maritime fleet. However, it would seem that even they are “talking out of both sides of their mouth.”  Here is a clip from their challenging 4/13 piece.

Contrary to many perceptions, international cargo movements have been growing quite vigorously in recent years. There has been a good recovery from the damaging setback experienced in late 2008 and 2009, when the global financial crisis caused the ‘Great Recession’, which severely but temporarily reduced world economic activity and trade volumes. The upwards trend in seaborne trade resumed and continues, with most forecasts suggesting further strengthening through 2013. A positive trade scene is therefore evolving; some other factors which affect shipping demand have been beneficial as well. On the other side of the balance sheet, enormous amounts of new shipping capacity coming in to the marketplace (partly offset by higher scrapping) has greatly swelled the fleet, as discussed.

The fact of the matter is that, the constant growth of the cargo shipping industry is transforming the manner in which consumer goods are transported internationally, and in doing so; the evolving sector has created opportunities like shipping container investments that offer steady investment returns for investors.

Global shipping – a dynamic market

Tankers, bulk carriers and container ships are the most important means of transportation of our time. Each year they carry billions of tonnes of goods along a few principal trade routes. Containerization has revolutionized global cargo shipping, bringing vast improvements in efficiency. The maritime boom could continue, despite the economic crisis.

Additional Information on Growth of Fleets is reflected in the Chart, courtesy of AT Kearney.

forecast growth in container shipping 2005 to 2014The available information at this point indicates the size, count and Dead Weight by Tons is already outdated from 2010, printed March 2012. The number of ships has increased significantly.

As you can see, the global container shipping industry is alive and well, much larger than one might imagine, and generates a huge amount of movement of goods; goods beyond domestic goods, oil and gas.  Moving cargo from one side of the world to the other and back again is an industry poised to meet the rising demand for goods in the United States, Europe and in many other parts of the world.

My advice holds true to all investment types: Thoroughly research the segment in which you wish to invest, review the statistics and altering views, and invest when the time is right. Global container shipping is an alternative investment option that is often overlooked, even though it has consistently proven to be a great investment opportunity.

Sources: Hellenic News, Alphaliner, World Ocean Review, Shipping Statistics and Market Review.