Mitsubishi HC Capital will invest approximately 200 billion yen ($1.35 billion) this year in shipping containers through group company CAI International, the largest such purchase in 2024, Nikkei has learned.
Tensions in the Middle East have caused container ships to avoid passage through the Red Sea and Suez Canal, extending the length of voyages and tightening market demand for containers while global maritime trade volumes remain strong.
The price tag includes orders placed for the entire year. This will total about 700,000 containers, about 20% of its total holdings at the end of last year.
Of these, 90% are dry containers that carry household and industrial goods at room temperature. Refrigerated containers for perishable foods and medical supplies will also be ordered.
Mitsubishi HC Capital has the world’s fourth-largest share of marine container leasing at 13%. The containers will be ordered by CAI International, a U.S. company and global leader, and leased mainly to shipping companies in Europe and Asia.
Leasing companies own 50% of the world’s containers and supply them to shipping companies, which have needs that change according to market conditions and other factors.
Global container production in 2024 is expected to reach 5.79 million twenty-foot equivalent units, about 2.5 times the volume of the previous year, according to U.K.-based Drewry Research. This is the highest level since 2021 when the container market was booming due to the growth of transport volume driven by stay-at-home demand from the COVID-19 pandemic.
In addition to increased demand for containers due to high trade volume, geopolitics is also driving demand. Many shipping companies have been avoiding passages through the Red Sea and Suez Canal, an important link between Asia and Europe due to conflict in in the Middle East.
Container ships from Asia to Europe are instead rounding the Cape of Good Hope on the southern tip of Africa, extending voyages by about 20 days. This has reportedly increased the number of containers needed, resulting in a shortage.
In anticipation of an increase in import duties on Chinese goods transported on Asia-North America routes, U.S. companies have moved up procurement for the year-end sales season as the U.S. presidential election approaches in November. Therefore, tight supply-demand conditions are expected to continue for the foreseeable future.
Mitsubishi HC Capital entered the container leasing business when its predecessor, Mitsubishi UFJ Lease & Finance, acquired U.S.-based Beacon Intermodal Leasing in 2014. In 2021, it bought CAI and combined the two companies in 2023.
Lease rates are hovering at high levels due to increased demand, and revenues are higher than in previous years, according to Mitsubishi HC Capital. It plans to continue to invest aggressively while keeping an eye on market conditions and plans to place orders totaling around 100 billion yen next year.
