There should be no surprise that container leasing would emerge each year as a source of significant change and challenge impacting the logistics indus-try in 2019. The year just completed saw record production of new equipment as both lessors and carriers sought to catch up with lagging production in 2016 and 2017. Leasing companies remain the main buyers of the equipment.
The building of refrigerated equipment will remain strong, trying to catch up from two years of slower production. We anticipate the reefer market in 2019 to outpace overall prevailing market trends. This will be further exacerbated by possible conversion from bulk reefer to containerized reefer as a result of bulk reefer carriers reducing capac-ity because of financial operating expense implications.
As a result, there may be a shortage of reefer containers in the year ahead. An aggressive company like ours will continue to have a primary focus on the reefer markets, and we will continue to make significant investments in this equipment asset class, allowing us to meet our customers’ needs.
IMO 2020 compliance regulations will create significant cost structure challenges to vessel operators, and capi-tal expense management will be a high priority for all lines. Container leasing and financing solutions will afford car-riers a variety of options with assisting carriers with improved cash flows and capital preservation benefits. A leasing company can assist carriers with sale lease-back opportunities, which will afford vessel operators the ability to raise operating income by selling equipment with a lease-back structure without disrupting operations.
In 2019, container leasing, like all aspects of the industry, will continue to rely more and more on technology as a means for survival. SeaCube will continue to invest in technology with the goal of bringing it to our customers in a manageable, cost-effective way.