How To Lease A Shipping Container

Everything you need to know about how to lease a shipping container, but didn’t know to ask.

20ft Event Reefer - Cargostore

Why Our ISO Containers Are Leased For Long Periods

Odd as it may sound, most of the ISO containers we lease are not used for shipping…they’re used for storage instead. 

Yes, they get shipped around the world on enormous container vessels – but only until they reach their intended destination. From that point onwards, they’re on dry land for months and often years at a time.

 And that matters because it affects what kind of lease you’ll need…

Types Of Lease For Shipping Containers

There are four ways to lease a shipping container:

  • one-way lease – flexible duration and drop-off (low cost)
  • short-term lease – 6-24 months, restrictions on drop-off (higher cost)
  • long-term lease – 2-5 years, restrictions on drop-off (medium cost)
  • master lease – flexible duration and drop-off (higher cost)

One-way leases are fine if you want to import boxloads of stuff from the Far East. But then you’re stuck with empty ‘deadhead’ boxes that must be shipped back empty to somewhere – unless you have cargo to export.

So most of our intermodal (ISO) business tends to focus on major corporate clients, security, aid and other organisations that need long-term container storage solutions in challenging locations around the globe. (Though we’re always keen to help with other shipping enquiries too so don’t hesitate to contact us).

 And given the nature or our business, virtually all our ISO containers go out on master lease agreements (MLAs).

How Master Lease Agreements Work

MLAs are framework agreements: they set out all the fundamental conditions of the lease, such as:

  • price per day
  • types and numbers of containers
  • on-hire (collection) and off-hire (drop off) points.

 Master leases are very convenient and flexible – because they take effect only when you collect the container(s) from the depot. There will be a separate contract for each container, referring to the conditions of the MLA.

What Affects The Leasing Price?

These are the main factors that will determine the lease price quoted. This is what we need to know:

  • How many containers do you need?
  • What kind of containers do you need? Any specialised requirements?
  • How long will you need the containers?
  • Where will you pick up and drop off the containers, and are the locations higher risk due to geopolitical or environmental factors?
  • If you’re leasing refrigerated containers, do you have three-phase power available or will you need generators?

Another important price factor is the age of the container. Older containers can be a fraction of the price of newer ones. (We can offer you some bargains.)

All ISO containers must be watertight and reliable. As a leading lessor, we wouldn’t have it any other way. But the physical appearance of the container may also be an important consideration too.

Containers are built to last. A well-maintained unit may last for as long as 35 years. But it may not look quite as pretty at the end of its lifespan. Shipping tends to deal out some hard knocks and rust is inevitable in a maritime environment.

So containers used at elite/premium events tend to be much younger than those used in the world’s danger spots where a hard life is to be expected. For that reason, newer containers are more costly to lease.

Furthermore, hazardous environments may involve special arrangements for dropping off containers. We have boxes going into the Somalian capital Mogadishu as part of a stabilisation/humanitarian contract. Mogadishu is one of the biggest ports in east Africa, however, for various reasons, the containers must be dropped off at Mombasa in Kenya, some 575 miles to the south-west as the crow flies. From there, they’re then trucked to Mogadishu. That can involve a 21-hour road trip of nearly 800 miles. 

But we’re highly experienced at such matters. Some of our security contracts involve delivering containers to collection points in the middle of nowhere. No facilities, no landmarks – just a latitude and longitude reference.

We can send containers virtually anywhere in the world and that’s of great benefit to our increasing number of mining clients. After all, you can’t pick and choose your extraction environments – you have to dig where Mother Earth cached the motherlode.

Obviously, we’ll need all the containers back at some point. But as long as your registered office is in a sensible location, we’re happy if you are.

Leasing Refrigerated Containers (Reefers)

Container age and condition is even more significant when you’re dealing with refrigerated containers (and as the world’s largest supplier of DNV reefers, we should know).

Most reefers will operate in a temperature range of between -25° and +25° C, giving you the choice of chilled or frozen – but there’s much more to it than that. What if your reefers are destined for hotter climates and you need to look at max operating temperatures closer to 40° C?

Or what if you need something much colder than normal? In theory, ‘frozen’ means -18° C. But last year there was a big scramble for highly specialised reefers because the Pfizer Covid-19 vaccine needed to be transported at -70°C. In desperation, lessees were searching out tuna storage reefers which go down to -60°C.

And then comes the question of whose refrigeration kit you’d prefer on your reefers. There are four main players: Thermoking, Carrier Transicold, Mitsubishi and Daikin.

Pretty much all our DNV reefers have Daikin units. They’re powerful (good for both non pre-cooled and deep-frozen cargo), precise, stable and offer great energy savings.

But for ISO containers going into challenging locations (especially in Africa), we’d recommended Carrier Transicold because of the massive and widespread support network. Spares are readily available in any condition: new, refurbished or used. You can get hold of bearings, compressors, coils, contactors, controllers, condensers, sensors, valves…the lot…very quickly and cost-effectively.

Other Factors That Can Affect Leasing Arrangements

As we mentioned before, sooner or later your shipping containers will inevitably spend some time at sea: they’ll need to be transported. (And if they’re staying offshore, then you specify DNV boxes that can cope with the added punishment.)

Everyone knows the price hikes and logistical upheaval that the global shipping industry is going through because of disruption to supply chains. This has been caused by the rush to restock inventories depleted during the worst of the ongoing Covid-19 pandemic.

Container ships continue to experience significant delays. Queues of boxships continue to moor off Los Angeles and Long Beach. In China, ships are backing up along the Yangtze as pilots are forced to quarantine due to Covid-19.

So shipping delays – and the added costs they bring – remain an unfortunate fact of life for the industry. Just 34.3% of cargoes reached port on time in Q3, according to Copenhagen-based analysts Sea-Intelligence.

And for Taiwan’s Evergreen (the guys who blocked the Suez Canal), that punctuality figure was just 13.2%. Even the best of the bunch (Maersk) managed only 45.6% – and every other carrier was below 40%.

The average delay for late-arriving vessels was 7.32 days so you’ll need to factor that into your leasing plans.

But if it’s of any comfort, Drewry’s Composite Container Index was down 2% week-on-week at the time we wrote this post. So keep your chin up.

Why Cargostore For Leasing Shipping Containers?

 

Cargostore is one of the world’s fastest-growing suppliers of ISO and DNV 2.7-1 containers for onshore, offshore and shipping.

Customers rely on our containers for a wide range of commercial operations, large scale event catering, mining, stability and aid including peacekeeping and humanitarian missions. Our containers are being leased all over the world – notably in Africa and the Middle East.

Lease (or buy) containers from our wide range:

Get Expert Advice On Leasing Containers

Contact cargostore in London, Abu Dhabi or Holland to lease containers for shipping and/or storage. You will benefit from:

  • expert technical advice and fast quotes from our highly experienced team
  • seamless transition to a smooth and efficient finance team – fast credit checks and paperwork
  • excellent operational aftercare – proactive assistance for unit repairs and troubleshooting
  • depots worldwide.

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