What Does it Take to Profitably Rent and Trade Containers?
If you knew it is possible to rent
a container for $27,375 dollars per year-or-more-on a $2500-$3500 dollar investment would you be interested? Saavy
investor Warren Buffett thinks so, he owns one of the largest container rental companies in the world to prove it.
According to the American Association of Railroads, Rail intermodal loadings posted
year-over-year gains for 56 months in a row. Ocean containers have been fueling the boom. The National Retail
Federation(NRF) predicated in August 2014 that import volumes at US ports covered by its Global Tracker report
would reach the highest level ever recorded for one month since NRF launched this product in 2000. How many
opportunities are there to rent a shipping Container? According to one source, there are over 200 million
worldwide opportunities per year in a single Market Channel, and this number is growing.
If you are looking for an investment opportunity to strengthen your portfolio across diversely growing
market channels, investing in equipment leasing and trading endeavors is certainly worth taking a look at. As an
Equipment Lessor, or prospective lessor, you not only invest in equipment, but you are investing in markets that
demand container service across a multitude of industry channels. At the same time, this is a business that has a
solid potential for long-term success.
For equipment brokers, traders and
wholesalers, containers, at their core, can be considered commodities. They can be lower in value where there are
surpluses, or at premium values in deficit markets-typically ports, where steamship lines discharge them. The secret
is to locate these deficit markets and move containers into them. But how do you move them? How do you find them.
How do you communicate with buyers before you move equipment to them? What is the cost? How do you find partners,
delivery companies and find the types of equipment and service providers? The key is to find freight that needs to
be moved, and offer the transporter a container at a discount while lining up your service providers along the way.
This company may also need to rent the container for long or short-term storage after they ship their freight.
Consider this example as a scenario of a One Way Rental: the most profitable transaction in the industry.
Railroads and steamship lines typically charge $50 to $100 per day for shippers (the ones renting
the container) to move their freight from point A to point B.For example, it takes 10 days to move the
freight from and East Coast Port to a West Coast port. Take an average of $75 per day x 10 days, this is $750 dollars.
(Carriers will typically charge penalties if the equipment is not returned at the end of the agreed term and
the price can start at $125 per day for 5 days and then increases to $175 per day after that). The
container investment is $2500 to $3500 dollars. The bottom line is, if you invest in a container for $2500 - $3500
dollars, rent it for $75 per day for a year, this has potential income of $27,375.In the first part of this
scenario, if you move the container from one port to another port, you can certainly sell the container and make a profit. But why sell it if you can generate this amount of income from a rental? The call is totally up to the equipment owner, but hopefully you get this gist of this.
Here are a few links to stories related to equipment being detained and shippers are required to pay demurrage. Shipping Container Suppliers Announce Surcharges at Ports Containers can be held, detained, for a number of reasons, even when government enforces laws. Jet Ski Champ Pays.
The key challenges include finding where to make your investments, promote your opportunities, and network with other
equipment traders. There are systems available to large members of railroad, steamship and trucking operations, but these
systems are very expensive and have strict requirements. These system owners are not interested in casual or smaller business clients,
but we at containerrental.com are.
Containerrental.com provides a portal for equipment suppliers and consumers to post, promote and communicate their needs to each
other; this is the huge trading gap that Containerrental.com fills. On top of this, containerrental.com can function on a global level, and
promote the postings online.
Their shortages are our opportunities. One of the fundamental location
features of the “big” systems is that they are limited to railroad ramps, storage depots, airports, and
ports. These locations are characterized with standard 3 and 4 letters international codes. Herein lies a
major difference between containerrental.com and the big ones. Because containerrental.com is GPS based, this literally provides
the ability for equipment to be posted and searched for anywhere on earth, thereby giving suppliers the power
to promote equipment at ramps in addition to around ramps and anywhere in between.
global markets, the use of containers continues to dominate the transportation of non-bulk commodities, and
this continues to ripple into many sub-industry segments. For example, in 1999 over 200 million container
moves took place across the world maritime ports, and the forecast suggests strong growth in the future (from
the Center for Transportation Research). In addition, 2004 marked the year that container freight
passed coal as the number one source of railroad revenue in the United States (from the Intermodal Association
of North America). The positive correlations of statistics like these are everywhere, and the room for
expansion is very apparent.
It is a significant piece of your history, your heritage,
and your future.
The truck rental business, a version of equipment leasing, traces its
history to shortly after WWII, an age of vast industrial growth in the US. During this time,
Americas& love of the automobile was born, and the United States blossomed into a car-dependent
society. People were no longer restricted by geography to realize their dreams of better jobs and
retirement locations; they could just pick up and move. It was this time that L.S. Shoen fulfilled
demand from families to rent trailers that made moving easier- with no labor cost involved. He
believed there was an economic opportunity to build a nationwide company by providing the niche
service, but like all small companies, he needed capital to invest in more trailers to respond to
demand. At this time, he turned to friends and neighbors for investment capital. Shoen set up the
agreements that allowed the investors to own the equipment while he managed and rented it. The
investor received rental income and profited from the arrangement, and Shoen received a management
fee on rentals.
Today, this business is known to as the UHAUL
Corporation. UHAUL is one of the largest equipment rental businesses in the U.S., and they rent
equipment to hundreds of thousands of customers every year from thousands of locations. They are
also the largest propane tank refilling company and are ranked among the top self-storage
owner/operators. But there are some consumer problems in the rental of trucks, namely safety,
which proves to be an expensive endeavor.
the only one who thought the Equipment Leasing business had major potential. Warren Buffet also
saw the equipment leasing business as a prudent investment. Today, Buffet's company, XTRA
Corporation, is one of the largest intermodal equipment-leasing providers. With an asset base of
over $2 billion, a worldwide infrastructure of people and facilities, and a first-rate portfolio
of service and operational support, time has certainly been friendly to Buffet’s investment.
Buffet, who makes his living by investing in fertile markets, invested in equipment leasing because
he knew there was notable potential in it.
Another bit of history
critical in understanding equipment leasing’s success is the story about someone who
revolutionized transporting goods, Malcolm McLean. McLean started his trucking company with a
pickup and a dream. His acute observations and creativity in the trucking business led him to an
idea to place containers on ships to move freight up and down the Eastern Seaboard. The idea behind
this was that as the ship reached destinations, his trucks could pick up and deliver the freight more
efficiently by eliminating competitors trucks from the road. The use of containers on ships
decreased the amount of labor needed to handle freight piece meal, reduced theft and damage, and
maximized operating efficiency. The idea of utilizing containers in this manner sparked another
notable source of revenue. This money came from renting containers to customers that were not quite
ready for their freight. Upon physically deploying this idea, this company made $5.5 million dollars
(In the 1950s) in its first year, simply due to fulfilling a demand and cutting the middleman. It
is also reported that he sold his company in the 1970's for an estimated $700 million dollars.
Today, the business is known as Maersk SeaLand Shipping Lines, the largest container shipping
operation in the world.
McLean's system has continued to
evolve and grow to reach innumerable milestones. This system continues to move freight efficiently
and safely while maintaining the integrity of the contents. It is precisely this system and its proven
capabilities that our company seeks to emulate. Building on existing success is our competitive edge.
This strategy fosters success, profitability, and long-term growth.
Turning Ideas Into Success for You!
Pursuing an Equipment Lease
business opportunity begins with familiarizing yourself with the industry, making contacts, and
promoting your equipment transactions. containerrental.com is committed to extending and building upon the
opportunities that continue to ripple from this base of ideas. We are passionate about the industry,
and we would like to cooperate with interested parties at our site, containerrental.com.
What to Expect as an Equipment Leasing Player?
does not make any guarantees of success. As an equipment trader, you can invest in new, used,
restored or one-trip containers as well as wooden storage/shipping vaults. At Containerrental, traders
can invest in International Standard Organization (ISO) steel containers, wooden storage vaults,
and other types of equipment. At our sister site, containerrental.com, there is a full spectrum of
equipment trading options, including the ability to announce intent in buy or sale posts without
making any commitments.
Why Invest in Equipment Leasing and
One of the paramount benefits of equipment
trading is that you have total control over your investment. You will be an active hand in the
equipment that you manage. You can be responsible for managing, leasing, buying, and selling
equipment. Traders will access our information system to post availabilities and needs.
One of the most important aspects of our information management system is that it is built on an
open platform, which requires no software installation or purchase. This approach allows you to login
to a secure server where you can manage all aspects of your equipment. This provides you with complete
freedom to login anywhere at any time to manage your equipment. The containerrental.com system is designed to
maximize your network opportunities so your equipment is being used to its full potential. The system
has a multitude of easy equipment management tools; one of the key features allows you to negotiate your
equipment based on selected criteria (price, term, location) that you decide. Once your terms are met,
the equipment will be reserved, booked, utilized and tracked. To find out more about the system, please
visit our web site and stay posted for updates.
How does Containerrental.com help you with making a return on your shipping container investing?
Containerrental.com is a website dedicated to supporting those who are active managers and owners of their
shipping container, storage container and moving container investments. Here is how we help out:
- -Provide an open web based shipping container marketplace.
- -Provide information tools for posting new posts and maintaining existing posts.
- -Provide repositioning opportunities(Saving money when needing to move equipment from surplus
markets to deficit markets.)
- -Provide local moving container and one way rental opportunities.
Start with a Free Membership
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