Container lessors riding the boom

CAI International splashes US$ 1.35b on container acquisition to support strong demand.

It has emerged that Textainer is in talks to acquire Seaco Global, a deal that would almost certainly raise issues about the level of market concentration in the container leasing industry.

Textainer is the latest leasing company to have a new ownership structure following the decision of its management to sell the company to Stonepeak, an alternative investment firm based in New York, in a deal worth US$7.4B.

Shipping lines are returning some containers, but at this point not in numbers that the secondary market cannot absorb; 98% of containers are on fixed rate terms and finance lease contracts.

As demand for new containers starts to fall Textainer says its performance in Q2 “demonstrates the resilience of our business model in the current environment.”

After making a loss in four consecutive quarters, Textainer returned to profitability in Q3 2017, with a profit of US$18.4M. The turnaround was driven by much better market conditions, and Textainer recovering from the impact of the Hanjin Shipping bankruptcy.