The New Year, 2018 began. New Year’s Day of the fair weather. It is quite refreshing and I could clearly see Mount Fuji in the distance. 3,776m above sea level. It is possible for us to see Japan’s highest mountain, Mount Fuji wherever from Kanto region. What a beautiful mountain it is! What kind of year would it be? No! I should more aggressively think what to do in the New Year. I want to spend days with such sprit to make at least something different from before or what to achieve in the year.
On Jan. 4 the Dow Jones Industrial Average stock prices in American stock market exceeded 25,000 dollars for the first time. After Lehman shock of September, 2008, the economic expansion in the United States has been lasting for 102 months from June, 2009 to December, 2017. On the other hand, the Nikkei Stock Average finished with 23,714 yen on Jan. 5th. The economic expansion has been continuing from December, 2012. The world stock aggregate market value is 86,530 billion dollars (approximately 9,800 trillion yen) which is record-high. It is standard of approximately 110% of 78 trillion dollars of the world nominal gross domestic product (GDP). This is already regarded as high stock prices. However, it is establishment of the U.S. Tax Reform Act. Reduction to 21% from a current corporation tax rate of 35%. It is thought that the current force of the world economy would continue at least in 2018 because USA tax reduction will support the world economy.
The world marine transportation industry of 2018 will be occupied 82% of world container fleets by the 7 major shipping liners from April onward when Ocean Network Express (ONE), after integration of 3 liner sections of 3 Japanese companies will start to operate. In the route between Asia and the European three Alliances (2M+HMM, Ocean Alliance, The Alliance) occupies 99%. We wish this would bring the stabilization of the freight rate and expect the healthy growth of the shipping lines.
The price of current New Container production is $ 2,350 per 20f. Total new containers stock in China factories is around 800,000TEU as of the end of Dec. 2017. Shipping lines, leasing companies would sequentially predict the positive demand for container of 2018, and it is indicated for them to have placed an order aggressively. Each leasing company would maintain utilization ratio high as ever. A certain leasing company records 99% of utilization rate and there is few containers left in the depot in the world.
The 2nd hand dealers have been facing the difficult situation now. However, it is necessary for shipping lines and leasing companies to replace used containers with the new ones in a cycle of approximately ten years. It is essential for shipping lines and leasing companies to dispose of the used container by all means. The 2nd hand container dealers are necessary in this sense for shipping lines and leasing companies. The leasing companies have already taken account of the selling price of their used containers as a profit in their book. If the sales price is low, there is little profit and try to sell it as high as possible. We, 2nd hand dealers would make an effort every day to spread the demand for used containers in the market to cope with demand of disposing the used containers from shipping lines and leasing companies.
It is necessary to take a building permit out of Ministry of Land, Infrastructure, Transport and Tourism now when we remodel the ISO containers to make a store, a house in Japan. I doubt why it needs the building permission out of the government because ISO containers are strong which could be piled up more than 7 containers in containerships and container yard in each port of the world. The private demand for the ISO container comes out explosively when this regulation disappears in Japan. I think it is quite helpful at the time of earthquake because it will change to Magic Box. We sincerely request the government to consider ISO boxes to change to Magic Box as necessary.
EF International Ltd celebrates the full ninth year in this March. We have undertaken the agency of seven overseas companies. Each of them has grown up little by little and now they have been quite reliable these days as they have begun to become the nucleus of our business. One of our agency businesses, UES International could win 10,000x40f HC L/T from Ocean Network Express (ONE), the integrated company of 3 liner section of NYK, MOL, K Line, which is the first time for ONE to have concluded before start from April 1, 2018. We are very happy to have been involved in this deal for UES to have concluded it with ONE last year. On the other hand, we have had a lot of business chances from various listed companies and leading companies these days. It was a great progress for us to have had an opportunity to handle tens of thousands of used containers of the shipping company in cooperation with our business partner last year. We sincerely would like to keep challenging in 2018 based on these valuable experience and results we made in 2017.