Letter from the Editor

EDITOR’S LETTER

It has been around 20 years now since HCB first started publishing a Tank Guide, which has appeared more or less once a year. Over those two decades we have recorded companies coming and going, names and contacts changing, and the business continuing to develop.

This year is no exception. Months of in-depth research have revealed a lot of changes over the past year: more than 1,000 in total compared to our 2017/18 edition.

What is perhaps most surprising is the number of new operators and lessors that have entered the market, alongside a significant increase in the number of companies acting as their agents or as freight forwarders with specific activity in the tank container sector. This reflects comments we have been picking up from industry and the clear increase in competition for business.

To some extent the growth in the number of companies active in the industry is a reflection of continued expansion in regional and global trades in those liquid products that tank containers excel in carrying – primarily chemicals but also other downstream products from the oil and gas sector as well as beverages and foodstuffs.

Another salient factor has been rising output of new tanks at attractive prices from Chinese manufacturers, which now have a completely dominant position in the market. For a couple of years now, the major leasing companies have taken advantage of those prices to expand their fleets – even if that meant the sight of new tanks stacked up at depots waiting for employment.

More recently, those same economics have attracted companies new to the container leasing game as well as the world’s major tank operators, many of which have taken the opportunity to expand their fleets. New operators have also emerged in the market and we hear too of shippers developing their in-house capabilities. China Railway Tielong continues to aggressively expand its presence in tank containers (including swap bodies) as the concept gains a firmer foothold in China.

Those trends seem to point to advantageous conditions for bigger players; a larger fleet offers opportunities to increase utilisation, since the operator has the option to have empty units available wherever they may be needed. Many of the leading operators have also invested heavily in new technology aimed at digitising the supply chain and making the market more transparent.

On the other hand, smaller tank operators can leverage those same IT developments to help them compete with their bigger rivals. And, despite the tendency for new technology to erode the importance of personal contacts between an operator and its customer base, small operators active in specific niches can still find plenty of employment for their tanks.

As such, many operators – both large and small – have this year been reporting higher levels of tank utilisation and noting that per-tank earnings have bottomed and are beginning to improve.

Given that tanks last for decades, and taking into account the continued increase in the number of tanks built every year, those indications of market recovery suggest that a lot of the new production is being soaked up within China, where tank container use is still growing – and has the potential to grow even further over the coming decade.

In light of the above we confidently expect yet further growth next year not only in the size of the world’s tank container fleet but also in the size of the HCB Tank Guide.