Container Rentals Market Boosted By Shortage
Friday, 2nd July 2010
High new build prices, reduced factory shifts, extra slow steaming and increased demand for exports in the Far East are all contributing factors to the massive container shortage at present.
Leasing companies and shipping lines have been quick to capitalise on the situation by increasing rates and only offering long term leases with drop offs limited to the Far East. The lines too are toying with the idea of including repositioning surcharges to shippers to get their equipment back to where they need it.
Unable to buy new or used containers due to price and availability many are now turning to rentals instead. Rates have gone up reflecting the cost of new boxes however short terms can be agreed and many are taking this option while they wait for sale prices to come down.
Self storage is also benefitting, with some in London and Essex almost completely full. Their success however may be limited, due to the lack of containers for sale and high land prices expansion will be difficult.
The downside to rentals is when a customer needs something slightly out of the ordinary from their shipping container such as a conversion . Quite often customers need special modifications to their box and unless they are prepared to lease the container for a sufficient period and at a rate that allows the lessor to recoup the cost of the conversion plus profit buying the unit is usually the only option.