Types of Container Leasing Agreements

Container Leasing Arrangements in the Shipping Industry

Container leasing offers customers a better, more flexible, and easier way of owning shipping containers. With container leasing agreements, leasing has been standardized. The trade chain is a well-established and extensive market overseas. Its growth has led to dynamic changes. The import-export business has branched out tremendously, incorporating many industrial sectors to suit their needs. Therefore, there is rising demand among companies to own containers for the smooth functioning of their trade markets. Some buy, while others prefer leasing. The container leasing industry is flourishing as it offers flexibility and low-cost maintenance compared to buying. Thus, many trading companies choose it as a better option.

About Container Leasing

The logistics industry revolves around cargo, containers, and shipments. Companies heavily invest in owning durable and tough-built containers. Instead of investing in multiple containers, renting or leasing containers is feasible and cost-effective. 

Why lease containers?

The decision between buying v/s renting containers might be difficult. With a simple set-up, installation, and reasonable cost, leasing a container, is appropriate for temporary or single use. You need not worry about the hassle of maintaining or disposing of the containers. Leasing also ensures easy swapping of containers if their size differs from your current demand. Therefore, you can opt to lease containers instead of buying them.

What are the different types of Container Leases?

Depending upon consumer demands, logistics companies have multiple types of leasing arrangements. To determine which shipping container leasing agreement is ideal for you, consider all available options and their benefits. 

  1. A lease on finance: Mostly referred to as Purchase Lease, it provides the lessee with the ownership of the containers for an agreed period. The lessee becomes the legal and documented owner of the containers and becomes liable for the maintenance and insurance. When the agreement ends, the lessee can either give back or buy the shipping container at a prior agreed price. This is a cost-effective way of owning containers in the vast container-leasing market.
  2. Master Lease for Contents – Branched under a Full-Service Lease, the leasing company holds the ownership of the containers. Based on per day price, each container has its separate agreement. The containers are delivered to a container depot once the lessee makes the payment. The contract comes into effect only when the lessee collects the containers from the container depot. The lessor pays the cost of maintenance and repair. Since this lease is flexible, it benefits a lessee who wants to use the container for multiple trips. 
  3. Long-term Lease for Contents: Also known as Dry-Lease, the contract for new shipping containers extends from 5-7 years, and for old containers from 1-5 years. The maintenance and repair are to be done by the lessee. One can exchange new metal boxes or negotiate for current market leasing rates under this contract for the agreed period.
  4. Short-term Lease for containers: This ‘spot-market lease’ is for a shorter duration. If an urgent demand arises, you can go for this contract, which extends for over six months. It is one of the most expensive container leases; the lessee is responsible for covering maintenance and repairs.
  5. One-Way Lease for Contents: Cost-effective, no repositioning required; the ‘One-way trip’ contract is helpful if you have varied needs for different regions. Both the lessor and lessee benefit from this one-way trip. 

To-do list while leasing containers

  • When leasing a container, find the size that suits your needs. An ideal container size ensures proper packaging and prevents spoilage due to over-stuffing. 
  • Determine the container grade based on the state of the container.
  • Set a pricing filter based on the duration to require it. Choose the most economical, flexible, yet reliable lease—research the paperwork procedure for leasing and returning of containers. 
  • Ensure you have a proper place to store the leased containers. Many businesses provide convenient and free pick-up and drop-off services, allowing you to save additional expenses.
  • Look for the various container leasing agreements and pick the best one. 
  • Secure all your documents well for future purposes.

Container leasing is an efficient approach to meet the needs of your shipments since it is flexible and reliable. It is a significant contributor that is valued and trusted by major companies. Container Leasing Agreements have made trade consumer-friendly and viable.

LOTUS Containers is one of the best options for leasing shipping containers. Find out all there is to know about shipping and leasing containers at a reasonable cost.