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Where To Buy Shipping Containers?

Who has experience investing in shipping containers? How did it work out?

  • I've seen quite a few advertisements recently for investing in intermodal/shipping containers. Promises of > 10% returns and really ugly looking websites sounds alarm bells but the more I looked at it the more it started to make sense (as long as you disregard the companies advertising and seek out the established lessors). Wondering if anyone has experience in this area? This is what I've found: You can buy shipping containers fairly cheap: http://www.amazon.com/40ft-NEW-Steel-Storage-Container/dp/B002B8PJXC/ref=sr_1_35?ie=UTF8&qid=1333505921&sr=8-35 although for the more classier ones they will cost you more. There definitely seems demand for leasing out containers: http://www.bloomberg.com/news/2011-05-25/container-leasing-surge-shows-global-economy-accelerating-freight-markets.html The raison d'etre for leasing rather than buying seems to be the desire to put more cash at ships rather than containers. Anyone doing this? Any experience/tips?

  • Answer:

    See 's answer for an insider viewpoint.This partially from two different people associated with this business.Shipping Container leasing is a CYCLICAL business.  That means it goes up and down over long periods of time.When business is up, and container leasing rates are edging up, almost every shipping company can work with a bank to finance their shipping containers. When business has peaked, the shippers and logistic companies are happy to use a container owned by someone else, and not have their own captial at risk - even if the returns are good at that time.A number of things affect the demand for containers - like the economy of various parts of the world.  Europe is not look so good now, but the U.S. is getting better, so that's a mixed picture. If the consumer part of the world economy tanks, say due to a war in the Persian Gulf, or yet another financial crisis, consumer spending will be hit, and container demand (and prices) will drop.However, one other thing that does affect the demand for containers is how long they are on the ocean on a boat, or another way, how many trips can they make per years.That will change a lot in 2014, when the Panama Canal expansion is completed. http://en.wikipedia.org/wiki/Panama_Canal_expansion_project Today, at certain times of the years, ships have to wait offshore a day to 4 days to transit the Canal.  Since this happens pretty often, the containers can make fewer round trips per year. A Hong Kong to East Coast U.S. round trip takes about 60 days, if a faster canal saves 2 days each way, that 6% of the time.Shorter trips - like U.S. West Coast to Brazil - would see even more effects.*******Established Shipping and Logistics companies don't need to pay 10% plus for loans.  But it can be worth it to them to pay you 10%, but have you take on much more of the market risk (which a smart bank will not do).Many times that risk will be small and stay small over a few years. Sometimes that the risk gets larger....

Bill McDonald at Quora Visit the source

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There is a lot of stuff on the internet about shipping containers as an investment but, as someone who operated four container fleets over a period of 20+ years and worked for two container leasing companies over 12 years, I can tell you that: 1) Investing in shipping containers is a very strong prospect with very little downside and a lot of upside if the investment is made properly with a reputable company (not World or PT). 2) There are many things to know and understand about the shipping business (it's a very small word with very few players). If you don't have the background to understand what are the drivers in why shipping companies lease /buy containers, then you need some good advice and guidance. 3) There are lots of snakes in the grass concerning return rates, hidden charges, residual value, recovery of assets, responsibility for repair costs and repatriation, testing, insurance, etc. Yes, shipping is cyclical but when new boxes go into a leasing contract they usually go into a long-term lease of five years and then stay with the shipping line on lease. Rates do not vary much and these are usually a function of original purchase price. Rates are usually locked in by the long-term lease contract so there is not much variation in return. The Panama Canal expansion will have nothing to do with container leasing except it might actually reduce the number of boxes required! Container ships on liner services do NOT wait up to 4 days to transit the PanCan unless there has been a catastrophe (ships are pre-booked for slots to transit). James Clark is correct - regulation is everything in international finance and investment. However, there are reputable container leasing companies out there (public and private) and it's just a question of doing due diligence or getting good advice. Don't waste your time trying to read the Maritime Economics book. There is very little in there that is relevant or up to date about container and liner shipping and nothing that will assist a container investor to know any more about the business, the drivers, protocols or pitfalls.

Martyn Benson

My advice, first read this book written by Martin Stopford. Then make your decision.... http://www.amazon.com/Maritime-Economics-3e-Martin-Stopford/dp/041527558X

Raul Alvarez Prieto

As an investor who is always seeking an alternative to traditional investing strategies, I was completely open to this profitable opportunity and eager to learn more. The only consistent thing I found was happy investors, talking about their great investment experience with http://pittoship.com.au/ investing. What I did discover during my extensive research, was a good opportunity to invest and a company that makes a strong commitment to investors, that is reinforced by consistent monthly payments and industry leading customer service.

Samantha Sofia Evans

I I have done this once, when I moved overseas with a girlfriend and our stuff. It takes a long time to arrive. It arrives later than you do to the destination city, usually by two months, or one month. When you get the stuff out of the shipping container, it is dirty, moldy, dusty and wreaking of ship oil. If you invest in them -- I guess for people to rent them for shipping -- will this be a part of the customer experience you can deal with or can change? Maybe you can make the best shipping container experience out there.

Douglas Crets

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