News / Less demand for traditional containers this year, says CSD as profits tumble

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After peak sales in the past two years, container demand is under pressure this year, according to Cosco Shipping Development (CSD).

Reviewing the H1 23 performance on Friday, the parent of Dong Fang Container, the world’s second-largest manufacturer, said it expected the market to stabilise next year, when more old boxes will be scrapped.

CSD’s first-half net profit was down 59% year on year, to $151.86m, as its container sales fell 68%, to 185,100 teu, with the group’s pre-tax profit from box sales down 63%, to $170.4m.

CSD is also active as a container lessor through another subsidiary, Florens International.

Corporate secretary Cai Lei said: “In the first half of 2023, the global economic and trade situation was complex and volatile. Due to high overseas inflation and continuous tightening of the US$ monetary policy, the shipping industry underwent cyclical adjustments.

“The container shipping market continued to face the test of increasing supply, but with some new opportunities brought about by macro policy adjustments and green environmental protection trends, the relationship between supply and demand in the market is expected to remain at a rational range.

“In terms of the container leasing and manufacturing market, the overall demand for dry containers has slowed, while the special container market was active, with strong demand for new types including energy storage and folding units.”

CSD said over the longer term, with more demand for logistics services, it would explore “container-based IoT technology to integrate the flow of goods, capital and information”.

And management said that, in H1, to respond to surging demand for automobile shipping, the company had developed containers with folding frames to accommodate vehicles. The shortage of pure car and truck carriers had seen some forwarders and carmakers moving cars in containers.