When I first came across this question, it seemed like it might be a challenge to answer. Really, why would shipping lines want (or need) to lease their fleet of shipping containers from companies like Pacific Tycoon (for example)?
After hours of reading and researching I was convinced I had found the answer … to save millions of dollars. The world’s leading container shipping companies accomplished this by leasing cargo containers, which in turn reduces/eliminates the:
- Cost to Purchase Containers
- Cost to Maintain Containers
- Cost to Dispose of Containers
Cost to Purchase
The cost of purchasing a shipping container is around US$4000.00. Imagine having a fleet like Maersk Line has a capacity of approximately 2.6 million containers. That would require an overall investment of $10.4 billion. In late 2014, the CSCL Globe was just launched with a capacity of 19,100. That is nearly $160,000 in cargo containers, to fill, empty and refill just one container ship. With fleets of container shipping vessels that number in the hundreds, eliminating the need to own the containers presents an opportunity for container shippers to save millions of dollars.
Cost to Maintain
The planning and logistics that is necessary to monitor, maintain and manage millions of shipping containers on a daily basis, is a costly, labor intensive effort. For many of the leading container shipping lines, owning a fleet of cargo containers has become an unwelcome responsibility. One surefire way to lower overhead and operating costs is to eliminate the need to own containers. That said, Pacific Tycoon provides a good alternative that benefits both the shipping lines and investors.
Cost to Dispose of
Depending on the level of usage and the conditions it has been exposed to, the lifespan of a shipping container ranges from between 15 to 20 years. After it has reached its life expectancy, shipping companies must make appropriate (environmentally responsible) arrangements to scrap or recycle their unwanted shipping containers.
A Final Thought
With the rising container shipping industry competition, and the continued necessary multi-billion dollar investment into triple-e containerships, shipping lines are looking to cut operational costs wherever possible. For the moment, oil prices are accommodating but the operational expense of a container fleet is something container shipping lines would rather leave to the experts at a container leasing company.