6 BULKDISTRIBUTOR Equipment Leasing
May / June 2021
Seaco sees a bright future
There was a time when things did not move fast in the world of tank container leasing . But the past year has certainly witnessed big changes . The COVID-19 pandemic impacted the global economy in very short order , but this resulted in perhaps an unexpected demand fillip for tanks as pandemic-related raw materials desperately needed to be shipped quickly from source to end users . Speaking to Bulk Distributor , John Bannister , vice president tanks & reefers at global lessor Seaco , says that at the outset of the pandemic there was obviously a lot of caution in the market due to the uncertainty of where it would all lead . However , “ once there was more clarity , we saw demand increase mainly for storage purposes because products could not be moved or had to be moved in limited quantities , but plants kept producing ,” he comments . Now markets have started to open , and manufacturing pick up , Seaco is starting to see a rebound and demand for tanks increasing again . This demand has also been driven by the current shortage in shipping capacity and high freight costs which have put pressure on normal supply chains and the ability to position equipment to demand locations in a cost effective and timely manner . “ The outcome is that it appears to be driving demand to on-hire additional equipment ,” Bannister says . “ We have seen additional enquires for one-off shipments mainly for pandemic-related products like ethanol , but in general on hires have come from all customer segments . Moreover , demand has come from all regions .”
Now markets have started to open , and manufacturing pick up , Seaco is starting to see a rebound and demand for tanks increasing again
Digitalisation drive
Like businesses all over the world , the pandemic has accelerated the pace of digitalisation , as many employees started working from home and distancing measures obliged stakeholders to reduce – or even obviate – the degree of face-toface interaction . As a global business , Seaco had already incorporated a number of technologies to support its global operations well before the onset of COVID-19 and these technologies made the transition to remote working quite seamless , thankfully allowing the company to maintain its business activities while keeping people safe . This included the company ’ s approach to ensuring its people could
John Bannister – the tank leasing market has moved on considerably from the days of just leasing a tank , to one where customers are now looking for customised solutions , technical support , a deeper knowledge base and global coverage continue to develop their skills . “ Prior to the present pandemic , we took a blended approach to training , including some online , but mainly face to face programmes ,” Bannister explains . “ The company views ongoing training of its personnel as a critical element of its working rhythm so by July 2020 we embarked on a very comprehensive online training platform which covered every training need of the company and more . This allowed for this very important programme to continue through these difficult times . Looking ahead in the changing world of work , we are pleased to have begun such an initiative on the ground floor as the pandemic has generated a massive leap forward for online training and we are well prepared to progress the continuous development of our employees ,” he adds .
M & A
It may or may not be coincidental with the pandemic , but the past year has seen a flurry of mergers and acquisitions ( M & As ) in the tank leasing sector . Bannister believes that underlying trends have encouraged this rather than being specifically due to the current stressed economic situation . “ While there will always be a place in the tank market for niche players , to compete effectively in the wider market you do need a critical mass to be competitive ,” he says . “ It would appear that the recent M & A activity is partly to achieve economies of scale . In addition , while over the past few years the tank leasing market has been in a lull , there are signs that it is improving and offers growth
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opportunities in a sector that is very scalable , which could be why there are a number of new players entering into the market .”
What next ?
Seaco has continued to add equipment to its fleet to cover the phasing out of older units and keep pace with the current market demand for standard T11 tanks . As at 1 January 2021 this fleet stood at 43,000 units . And the leasing company has increased its focus and growth on the more specialised sectors of the market adding new temperature-controlled , lined and customer-specified tank designs . “ In addition ,” Bannister points out , “ we have diversified further to add 20ft and 40ft cryogenic tanks to our fleet .” Bannister remains upbeat on the near-term prospects for the tank sector , generally . “ We see the market remaining positive for the rest of this year ,” he says , “ and with the drive for more eco-friendly and safe transport solutions for hazardous products the growth in the tank sector should continue for the next two to three years . In addition , we also see material costs continuing to rise , which should drive tank prices upwards and this in turn should have a positive impact on leasing rates .” However , it will be important for tank lessors to broaden their service offering , he insists . Just renting tanks out for a given period is not likely to be a sustainable business model . “ It is interesting to note that the tank leasing market has moved on considerably from the days of just leasing a tank , to one where customers are now looking for customised solutions , technical support , a deeper knowledge base and global coverage from leasing companies supplying the units ,” he comments . “ We see this as a big opportunity for Seaco and have developed tank centres of excellence in key locations to provide this service and support .” All this points to the growing importance of scale and a global operational footprint ; factors that Seaco already has in place .
www . seacoglobal . com
To compete effectively in the wider market you need a critical mass
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