The container shipping industry is one of the younger shipping sectors, with the first containerized cargoes shipped in the mid-1950s. Containerization is the most convenient and cost-effective way to transport a huge range of cargoes, predominantly a diverse selection of consumer and manufactured goods, and as such has been a significant driver of globalization.
From 1993-2008, containerized trade grew at a compound annual rate of over 9%. 2009 saw the only year of negative growth in the industry’s history, on the back of the global economic slowdown, with volumes shrinking 8%. After a strong rebound in 2010 (15%), annualized demand growth has continued, although at somewhat lower levels than the trend rate prior to 2008.
The containerized supply chain extends throughout the world. However the most important trades are those linking the major manufacturing economies in Asia (above all, China) with the major consuming economies in North America and Europe and, increasingly, the intra-Asian trades connecting that region’s rapidly growing markets. Growth in containerized trade is linked to demand for manufactured goods and thereby to regional economic growth. However, historically this underlying growth has been boosted by both the containerization of breakbulk goods, including refrigerated cargoes, and the outsourcing of manufacturing from Europe and North America.
The rapid expansion in containerized trade has also led to a rapid expansion in the global containership fleet, of which the vast majority of vessels are fully cellular - fitted with cell guides for containers throughout the ship, optimizing container stowage and significantly enhancing the efficiency of load and discharge operations. Between 1993 and 2012, the nominal carrying capacity of the fully cellular fleet grew by a compound annual rate of almost 11%.
Within the container shipping industry, key participants include shippers, liner companies and charter-owners. Shippers are the senders and receivers of containerized cargo. Liner companies (also referred to as lines or operators) are logistics service providers responsible for the seaborne, and often also inland, transportation of containerized goods; they negotiate freight rates with shippers themselves, or with third parties such as freight forwarders/consolidators. Liner companies either operate vessels that they themselves own, or lease vessels from charter-owners. Charter-owners (also referred to as containership owners or containership lessors) own containerships and lease, or charter, them out to liner companies. Today, around half of the fleet, measured by TEU capacity, is provided by charter-owners – up from an estimated 16% in 1995.
In the containership charter market, leases are most often structured as timecharters. Under a timecharter, with the exception of fuel (which is paid for by the charterer or lessee), the operating costs of the vessel are borne by the lessor or owner. Charter periods can vary in length: the spot market generally refers to charter fixtures of 12 months or less, while term charters cover longer fixtures, with periods of 10 years or more not uncommon.
Global Ship Lease is a containership lessor focused on providing timechartered vessels, predominantly in the term charter market.