Importance Of Shipping Container Leasing
Shipping containers are a great investment. Today, they carry about 90% of manufactured goods across seas and land to various parts of the world. It is vital to know the details about shipping container leasing options and procedures. This information is for container leasing companies in Dubai and around the world, and for those who are looking for containers to ship their cargo.
Shipping container leasing is very much renting out an apartment or house. Here, the company that owns the containers rents it or leases it out to companies in need, generating annual or monthly income.
Not all big companies own shipping containers. Hence, they lease containers to transport their cargo across the world. The companies that have their own fleet of containers prefer to have a blend of owned and leased containers for their use. Leasing assures the availability of containers as and when they are required.
Important Container Leasing Options
Spot Lease
A spot lease lasts for a specific trip or a short period of time. Also known as a short-term lease or a trip lease, the prices for spot lease tend to fluctuate with the demand for containers. When there is less demand, companies tend to give spot leases for lower rates so that they ensure that too many containers don’t lie around idle.
Term Lease
When the company that needs the container (or the lessee) requires it for a longer period of time, the term lease comes into use. The responsibility of repositioning, maintaining, and management of the container lies with the lessee. A term lease may extend for as long as five or eight years. This itself makes for half the lifespan of a container at sea.
When the lease ends, the lessee can opt to extend it or deliver the container to a particular location.
Master Lease
Master leases are also known as full-service leases or pool management plans. There are some aspects that make the master lease unique:
- It allows for a great range of flexibility for the lessee.
- The lease is drawn for both maximum and minimum capacity containers.
- The duration can vary from short to medium time.
- The amount charged is based on credit rather than cash.
Under the master lease, the leasing company is fully responsible for the management of the container fleet. They also act as logistics service providers where they must allocate the containers in view of the lessee’s transport strategies.
Master leases are very popular because:
- The price of the lease will fall when there is lesser demand and more competition within companies.
- Increased customer acceptance because of lesser responsibility.
- The price of the master lease can sometimes be lower than that of doing the work in-house.
Why Are Containers Leased By Shipping Companies in Dubai?
The answer to this is simple.
- Companies lease containers to maintain their balance sheet and keep the supply chain flexible.
- This flexibility is crucial because it allows those in the shipping line to have easy access to containers in specific locations.
- With the availability of containers, adjustments can be made as per the surge of demand.
- Demand pushes the utilization rate of containers which converts to more income.
- If the utilization rate drops, it will lead to idle containers sitting in various locations and additional depot charges.
Also Read: Owning Vs Leasing Containers: The Big Debate
How Does Leasing Work For The Company That Owns The Containers?
The market for freight containers fluctuates with the season and demand. There is never a year-round necessity for companies to make use of containers. Christmas and holiday season drives the demand for goods, which in turn drives the demand for manufacturers to put their cargo into containers and get it out on the store shelves.
The global economy also dictates the demand for containers. Hence, there are many challenges for the company that owns the containers.
- When business is slow, depots will charge for all the containers that are sitting idle.
- Idle containers are exposed to weather conditions and are more prone to rust and depreciation.
When containers are leased, they are on the move and they can be used anywhere and be a source of income for the company.
Container Leasing Companies in Dubai
Are you looking for companies that lease containers in Dubai? We at Gulf International are the most prominent name in that line of business. We take care of all the paperwork and the hassles of leasing for you. What you will have is a simplified leasing agreement that works for your budget and other requirements.
At Gulf International, we are well-experienced in dealing with both big and small companies. No one better than us understands the complexities of paperwork, regulations, and time needed to get your business going. We also deal with containers for sale in Dubai.
Allow our team to help you with the best plan for leasing containers. Visit our website or call us for further details.
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