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Shipping containers are defined to facilitate the transport and carriage of goods without the need to unload and/or reload the cargo at intermediate points. These containers are large rectangular boxes made of a special corrosion resistant grade of steel and are characterized by high strength and durability. Containers are usually made up of steel and aluminum. The size and type built of each container comply with specifications and regulations formulated through ISO (International Organization for Standardization).

Shipping containers are classified into three major categories, namely tank containers, reefer containers, and dry containers. Dry containers are the most normally used containers and are used in the transportation of bulk cargo, whereas reefer containers are used for transporting perishables like fruits, vegetables, and dairy products, among others.

Tank containers are cylindrical containers fitted in a rectangular steel frame. These containers facilitate intermodal transport of liquid chemicals and other liquids from one place to other. There are, however, other types of containers that cater to specific needs, like containers for transporting out-of-gauge cargo. These may be either platform type or open-top containers, among others. The demand for shipping containers is influenced by a number of factors. One of the main factors that are predicted to drive the demand for shipping containers market is the anticipated growth in seaborne trade during the predicted period.

Rising demand for transportation services is a main driver of the worldwide shipping containers market. Growing number of factories and manufacturing units has fueled the growth of the worldwide shipping containers market.

In addition, many government associations are also boosting the growth of the worldwide shipping containers market through offering specific guidelines to shipping firms.

However, high shipping freight rates obstruct the growth of the international Shipping containers market.

Furthermore, the containerized-ocean-freight industry suffered in 2015. Its continuing financial woes accelerated because approximately all key financial indicators declined from during 2014. At the heart of the industry's issues, a persistent worldwide supply-and-demand imbalance is to blame. All signs point to a continuation of that theme into 2016 and beyond.

The most-recent forecasts predict worldwide container fleet capacity to increase by 4.6 percent during 2016, and another 4.7 percent in 2017, though spot rates for main routes have dropped 21 percent to 44 percent from a year ago due to plunging demand, now about half the present growth forecast.

Since the Great Recession of 2007-09, carriers have struggled to find feasible solutions to this systemic issue. Most chose to act independently, embracing such initiatives as slow steaming, vessel idling, organizational cost-cutting, and information technology (IT) modernization. Although those measures have offered some tangible advantages, the carrier community may finally be coming to grips with the need for important industry consolidation.

Such consolidation would probable happen operationally, by more-powerful alliances, and financially, through mergers and acquisitions (MandA).

Some of the key firms operating in the worldwide shipping containers market are China International Marine Containers Co Ltd, Singamas Container Holdings Limited, CXIC Group Containers Company Limited, Maersk Container Industry AS, Dong Fang International Container (Hong Kong) Co Ltd, WandK Container Inc, TLS Offshore Containers International Pvt Ltd, YMC Container Solutions, Sea Box Inc.

In Pakistan, Pakistan International Container Terminal Limited's (PICT) profit increased 22 percent to Rs2.12 billion in nine months closed September 2016 with strong support from increased revenue and declined finance cost.

The terminal operator had earned a profit of Rs1.74 billion in the corresponding period last year. EPS (earnings per share) reached at Rs19.44 in Jan-Sept 2016 as against to Rs15.99 in the same period of previous year.

Pakistan International Container Terminal Limited's share price increased 3.53 percent, or Rs12.62, and ended at Rs370 with a thin volume of 200 shares at the Pakistan Stock Exchange.

Revenue increased 10 percent to Rs7.13 billion in January-September 2016 compared to Rs6.46 billion in the same period of last year. Finance cost declined 60 percent to Rs38.83 million from Rs94.68 million in January-September 2015. Cost of services dropped to 49.72 percent (or Rs3.54 billion) of the revenue from 51.87 percent (or Rs3.35 billion) in the previous year.

In the July-September quarter, Pakistan International Container Terminal Limited earned an after-tax profit of Rs714.78 million (EPS Rs6.55), which was 10 percent higher than Rs649.57 million (EPS Rs5.95) in the same quarter of last year. The growth in profit in the quarter remained lower than the nine-month period due to comparatively lower sales and higher service cost.
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Publication:Pakistan & Gulf Economist
Date:Dec 4, 2016

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