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Trifleet in WCN

WorldCargo News, edition April 2006

 

High utilization boosts lessors
Sustained high fleet utilization rates have encouraged tank container leasing companies to return to the new building market. High tank container prices in 2005 curtailed the new building programs of tank container lessors, historically the most prolific buyers of new tanks. However, despite the restrained purchasing programs and the weakness of the dollar, lessors have been able to maintain high fleet utilization rates over the past 12 months on the back of robust demand.
The strong market has been sustained into 2006, to the extent that several lessors believe that improving tank container lease rates can now support investment in new builds. The current activities of a number of major tank lessors are profiled in the following paragraphs.

 

Trifleet expansion

Trifleet Leasing, the world's third largest tank container lessor, has experienced a particularly busy last 12 months. In addition to broadening its customer base and creating a worldwide operations system which allows all its offices and customers to have real-time access to contract and fleet data, the company appointed Philip van Rooijen to take over as managing director in July 2005. In addition, Carol Maddox departed Trifleet in October 2005 to start her own company, Maddox Quality BV. "Our fleet now stands at approximately 8,100 units," states Philip van Rooijen. "Due to the high purchase prices for new tank containers, stemming from high steel prices and an imperfect market structure on the supply side,we only added a net 25 tanks to our fleet in 2005. Nevertheless, In spite of the weak dollar exchange rate compared to the euro and the continuing market pressure on lease rates, we increased revenues last year, as a result of strong demand and high utilisation. "Our fleet expansion plans for this year are much more ambitious. So far, we have ordered approximately 1,000 new tanks from manufacturers in China and South Africa. These units will join our fleet over the 2006-07 period."

 

Fleet strengths
In highlighting its strengths to the market, Trifleet Leasing points out that its fleet is a comparatively young one and that its tanks incorporate features as standard what the industry often considers to be an extra. Such features include pillbox covers, additional and horizontally positioned top flanges and heated bottom discharge arrangements. The availability of a unique, real-time customer log-in area with extensive information on technical tank details, rate indications and contracts is also marketed as a particular selling point. "In addition, unlike other major lessors, Trifleet accommodates a wide range of customer types, from major corporations and transport operators to state-managed enterprises," continues Philip van Rooijen. "Also, with tanks from our large, new orderbook now flowing into our fleet, Trifleet is able to meet orders for newbuild liquid and gas tanks on short notice." Major leasing companies, with their periodic orders for large batches of new tanks, are sensitive to the availability of tank container production facilities. This is a critical issue at the moment, with the bid by China International Marine Containers Group Ltd (CIMC) to acquire Burg Industries BV currently being reviewed by the European Commission's antitrust branch. CIMC is the world's largest manufacturer of tanks and amongst the Burg portfolio of companies is Welfit Oddy of South Africa, the world's second largest tank builder. At the moment, no other tank manufacturer is able to match their output. "To ensure fair competition and the availability of a good tank container at a competitive price, i.e. a price which supports lease rates that can be ealised in the market, our industry ideally needs at least three experienced, independent manufacturers with good technical knowledge and sufficient scale," believes Philip van Rooijen. "The country in which the tank containers are produced is only relevant insofar as this impacts on the price and quality of the tank container, and the relocation costs."
For its part Trifleet is accommodating the eastwards shift of the global tank container axis with its sales office in Singapore and agents in China, Taiwan, Indonesia and Korea. The buildup of this network helped the company increase its sales in the region in 2005.