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?
• World Trade
• Container Conversion
• Container Replacement
• Globalization of Manufacturing
Leased Fleet Size Forecast
9000
8060
8000
7000
6630
7030
7560
6210
6000
5000
4000
3000
1999
2000
2001
TEUs (000)
2002
2003
Lessor Portion of Fleet
Lessor portion of fleet has stayed extremely stable at approximately 40% to
50% of the total boxes available
90%
80%
Shipping Company
70%
60%
50%
40%
30%
Lessor
20%
10%
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
1989
1988
1987
1986
1985
1984
1983
0%
1982
Lessor Fleet Size Percentage
100%
Major Players
Mid-2000
(Rounded TEU ’000)
Tier 1
Tier 2
Tier 3
GE-SeaCo
Transamerica
Interpool-CAI
Textainer
Triton
Florens
Cronos
Gateway
Capital
GoldLease
Others
Total
Source: Containerisation International Market Analysis 2000
1170
1150
920
900
770
510
350
250
170
140
170
6,500
18%
17%
14%
14%
12%
8%
5%
4%
3%
2%
3%
100%
World Container Fleet on
Operating Lease (‘000 Teu)
Dry
Special
Reefer
Tank
Regional
Total
2000
5,009
322
235
74
175
5,815
2005
5,365
342
252
76
190
6,225
Why Lease Containers?
• Cargo Volume Imbalances
• Experimental Trade Routes
• Contract Cargo
• Lack of Adequate Capital
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
Leasing Process Model
Equipment Production
Forecast
Equipment
Needs
Order
Equip from
Factories
Equipment Disposal
Purchase
Used Equip
for Resale
Report
Used Equip
Inventory
Negotiate
Sales of
Used Equip
Supply Used
Equip to
Buyers
Accept
Equip from
Factories
Repair &
Maintain
Equipment
Allocate
Equip to
Market
Marketing
Technical
Operation
Resale
Finance
Position
Equip to
Market
Report
Available
Inventory
Contract Administration
Off-hire
Equip from
Customers
Off-hire
Activities
Preclear
Equip from
Customers
Market
Services to
Customers
Negotiate
and Record
Contracts
Bill
Customers
Rental
On-hire
Activities
Book
Equip to
Customers
On-hire
Equip to
Customers
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
Types of Lease Agreements
• Lease Purchase
• Long-Term Lease
• Master Lease
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
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
Master Lease
no commitment on lease period
• Contract Re-negotiation
• Booking & Credit Control
• Redelivery Control
• Enter into Repair Process
Major Challenges of the
Industry
•Shipping line consolidation
• Pressure from competitors
• Periodic new start-ups
• IT improvements
• Slow cargo growth rate
• Management Risk
Top Leasing Companies
2000 Fleet size 2005 Purchase
Transamerica Leasing
1,160
25
GESeaCo
1,155
60
Textainer Group
860
105
Trition Container International
705
140
Interpool
530
80
Florens Container Gorp
455
55
CAI
345
75
Cronos Group
340
35
Gateway Container Corp
225
60
Capital Lease
155
40
Gold Container
120
40
Carlisle Leasing
38
10
Other
512
95
Grand total
6,600
820
Total – operating Leasing
6,225
775
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