Container Leasing

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Container Leasing
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What are Cargo Containers?

• Internationally-approved standard dimensions
• Can be moved by various modes of transportation
• Size - "twenty-foot equivalent units", or TEUs

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Container Types

• Dry
• Open Top
• Flat rack
• Reefer
• Tanks

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What drives the Leasing Industry?

• World Trade
• Container Conversion
• Container Replacement
• Globalization of Manufacturing

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Leased Fleet Size Forecast
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Lessor Portion of Fleet
Lessor portion of fleet has stayed extremely
stable at approximately 40 to 50 of the total
boxes available
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Major Players
Mid-2000 (Rounded TEU 000)
GE-SeaCo
1170 18
Tier 1
Transamerica
1150 17
Interpool-CAI
920 14
Textainer
900 14
Triton
770 12
Tier 2
Florens
510 8
Cronos
350 5
Gateway
250 4
Capital Lease
170 3
Tier 3
Gold
140 2
Others
170 3
Total
6,500 100
Source Containerisation International Market
Analysis 2000
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World Container Fleet on Operating Lease (000
Teu)
2000 2005Dry 5,009
5,365Special 322 342Reefer 235
252Tank 74 76Regional
175 190Total 5,815 6,225
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Why Lease Containers?

• Cargo Volume Imbalances
• Experimental Trade Routes
• Contract Cargo
• Lack of Adequate Capital

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How does Leasing Company Operate?

• Car Rental Company
• Higher daily rate
• Convenient pick-up and return locations
• Customer responsible for damage/liability
  insurance or damage waiver

• Container Leasing Company
• Higher daily rate
• Pick-up and return locations along various trade
  routes
• Customer responsible for damage/liability
  insurance or damage waiver

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Leasing Process Model
Equipment Production
Marketing Technical Operation Resale Finance
Equipment Disposal
Contract Administration
On-hire Activities
Off-hire Activities
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What is Container Lease Agreement?

• Responsibilities of Lessee
• MR costs responsibilities LOSS
• Billing and payment conditions
• Daily rental rate
• Container on-hire locations costs
• Term of the contract
• Off-hire locations , costs CAPs

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Types of Lease Agreements

• Lease Purchase
• Long-Term Lease
• Master Lease

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Lease Purchase
Purchase option

• Negotiate a deal with Lessee
• Manufacture containers
• Position to lease-out port
• Lease out to Lessee
• Bill Collect per diem
• Sell container at the end of lease for 1.00

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Long-Term Lease
3-8 years lease period

• Pre-Clear units for redelivery
• Estimated for repair
• Request Survey
• Authorizes repair amount
• Repair the units
• Repair - Local bill
• Repair - Central Rebill
• Depot invoices is Paid
• Ready for next Lease-out

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Master Lease
no commitment on lease period

• Contract Re-negotiation
• Booking Credit Control
• Redelivery Control
• Enter into Repair Process

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Major Challenges of the Industry

• Shipping line consolidation
• Pressure from competitors
• Periodic new start-ups
• IT improvements
• Slow cargo growth rate
• Management Risk

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Top Leasing Companies
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For the trainer

• Keywords
• Why we need to lease containers from others?
• Ways to do the leasing
• Impacts on the leasing industry under current
  trade level