‘This year, everything was reversed, and Christmas was cancelled’

Image: ANP / Hollandse Hoogte / MediaTV

If there is anything that reflects the market ups and downs, it is the container business. When consumption slows down, the movement of goods does too, and so does the movement of containers, with a price drop as a result. Or vice versa. In a normal year, there is fluctuation according to the period of the year. This year, everything was different.

Osmo Lahtinen, Managing Director at the Finnish OVL Containers, explains how the usual ups and downs were not usual, how Christmas was cancelled and how all of this unusual is expected to continue in the year 2023.

Osmo Lahtinen

This year was a turbulent year. How was this reflected in the container business?

An overall lower demand for shipping has naturally led to more containers available in the market compared to the year 2021. This has led to lower leasing fees and lower sale pricing for shipping containers.

We had a good start into 2022, but then the demand decreased shortly after the war started, which led to low volumes throughout the spring. Then, the demand picked up again in the summer, but only for a few months until the high energy prices and increased interest rates affected the consumers and thus, there was again a lower demand for shipping.

How do these peaks and downfalls compare to the usual development throughout the year?

We usually see less demand in the beginning of the year and more in the spring, but this year this was reversed, with a high demand in the first months. The demand at the end of the year was lower than usual.

When it comes to the demand for shipping containers prior to Christmas, which is usually high, I would say Christmas was cancelled this year. We did not see the usual end of year peak in demand at all.

To which extent have you been able to adjust to the unusual circumstances?

Luckily, we are financially strong and operate only with our own boxes, which allows us to offer flexible and stable leasing and sales of containers to our customers. In addition to Europe and Asia, we also operate in North America, where we have seen a positive demand throughout the year.

Positively, lower container prices usually increase demand for Shipper Own Container (SOC) use. Using a SOC instead of carriers’ containers makes economically more sense in a lower price environment. This is good for our customers and allows us to dispose of some of our older equipment.

On the other hand, although we have been lucky to have our stocks evenly spread out throughout the world, we have had to limit off-hire possibilities to some locations because of a lack of depot space.

What do you expect from 2023?

We expect the relatively low demand to continue to the beginning of 2023, but to gradually increase towards the spring. Lahtinen Oy wishes everybody all the best for 2023!

Author: Majorie van Leijen

Majorie van Leijen is the editor-in-chief of RailFreight.com, the online magazine for rail freight professionals.

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