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Container Leasing

Container Leasing. What are Cargo Containers?. Internationally-approved standard dimensions Can be moved by various modes of transportation Size - "twenty-foot equivalent units", or TEUs. Container Types. Dry Open Top Flat rack Reefer Tanks. What drives the Leasing Industry?.

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Container Leasing

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  1. Container Leasing

  2. What are Cargo Containers? • Internationally-approved standard dimensions • Can be moved by various modes of transportation • Size - "twenty-foot equivalent units", or TEUs

  3. Container Types • Dry • Open Top • Flat rack • Reefer • Tanks

  4. What drives the Leasing Industry? • World Trade • Container Conversion • Container Replacement • Globalization of Manufacturing

  5. Leased Fleet Size Forecast

  6. Shipping Company Lessor Fleet Size Percentage Lessor Lessor Portion of Fleet Lessor portion of fleet has stayed extremely stable at approximately 40% to 50% of the total boxes available

  7. Major Players Mid-2000 (Rounded TEU ’000) GE-SeaCo 1170 18% Tier 1 Transamerica 1150 17% Interpool-CAI 920 14% Textainer 900 14% Tier 2 Triton 770 12% 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

  8. World Container Fleet on Operating Lease (‘000 Teu) • 20002005Dry 5,009 5,365Special 322 342Reefer 235 252Tank 74 76Regional 175 190Total 5,815 6,225

  9. Why Lease Containers? • Cargo Volume Imbalances • Experimental Trade Routes • Contract Cargo • Lack of Adequate Capital

  10. 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 How does Leasing Company Operate?

  11. Off-hire Equip from Customers Supply Used Equip to Buyers Negotiate Sales of Used Equip Forecast Equipment Needs Order Equip from Factories Accept Equip from Factories Position Equip to Market Negotiate and Record Contracts Report Available Inventory Allocate Equip to Market On-hire Equip to Customers Bill Customers Rental Preclear Equip from Customers Market Services to Customers Repair & Maintain Equipment Report Used Equip Inventory Purchase Used Equip for Resale Book Equip to Customers Leasing Process Model Equipment Production Marketing Technical Operation Resale Finance Equipment Disposal Contract Administration Off-hire Activities On-hire Activities

  12. What is Container Lease Agreement? • Responsibilities of Lessee • M&R costs responsibilities & LOSS • Billing and payment conditions • Daily rental rate • Container on-hire locations & costs • Term of the contract • Off-hire locations , costs & CAPs

  13. Types of Lease Agreements • Lease Purchase • Long-Term Lease • Master Lease

  14. 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

  15. 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

  16. Master Lease no commitment on lease period • Contract Re-negotiation • Booking & Credit Control • Redelivery Control • Enter into Repair Process

  17. Major Challenges of the Industry • Shipping line consolidation • Pressure from competitors • Periodic new start-ups • IT improvements • Slow cargo growth rate • Management Risk

  18. Top Leasing Companies

  19. 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

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