- Allen Czermak
How To Invest In Shipping Containers
I don’t know about you, but I did not know much about shipping containers, or the way products came to America until COVID-19 hit us badly taking away our freedom of always having all items at our disposal. Living near the Atlantic coast I did notice once in a while a shipping container carrier with all different colored containers but did not really know what was inside them or where they originated from. The only time I read about shipping containers was in a suspense novel where the antagonists attempted a major robbery of these product bearers. Only for the unfortunate reason of shortages of products have folks become well acquainted with these huge seaworthy cargo holders.
A practical trait of human nature is trying to make a profit from anything and a smart entrepreneur who is looking for some type of tangible and profitable investment can turn to shipping containers as promising profit makers. There are several different ways in developing equity in the shipping container industry such as buying stock shares in a shipping container company such as Hutchison Ports (with approximately a value of $2.3 billion) or Hamburg Container Terminal Tollerort to name just two.
Another method of investment in shipping containers is to actually be a partner to the buying and leasing of shipping containers. If you want to start a buildup of your own company, you may decide to purchase a single container and lease it out individually. It depends on your risk-taking skills and the amount of financing you have available to begin a journey into profit making through shipping containers. For the last five years, container lines have been showing an exorbitant return for their investors riding the container wave.
Investing in Shipping Container Stocks
Investing in shipping container stocks is a good option instead of the traditional investments such as Amazon or petroleum industries. A savvy investor has read about the shortages in good quality shipping containers especially refrigeration containers which go around the world again and again. Most folks are now aware that the technological side to shipping containers are in the outer trappings of the logistics companies who must arrange sophisticated and reliable transportation of the containers. Many of today’s shipping containers are priced in U.S. dollars and are an excellent safeguard against the euro. Another advantage of this investment is that so far, the regulations for shipping containers are quite flexible and can offer a 12% return per year as opposed to banks which are now paying the lowest interest rates in decades.
What Are The Tax Incentives Or Disadvantages When Investing In Shipping Containers?
Many countries are giving capital allowances and compensations against the rental income. Since a high quality shipping container is made out of nickel they have their own intrinsic value and they can always be sold individually worse comes to worse.( In a previous article we have written of all the wonderful things that can be made from leftover shipping containers such as motel rooms or actual permanent housing).
There are certain products that do well no matter what the economy is. Even if the inventory and customer needs decrease temporarily, shipping containers will always be needed to transport required goods that are needed in any economy such as pallets of medicines, underwear, and food staples in refrigerated containers. If you buy preferred stock in container leasing companies you will be able to learn about the industry while you are making a profit and you can actually see how this industry grows.
Buying or Leasing Shipping Containers
An investor's first practical thought would be to lease rather than buy. However, in reality it would really pay to use a third party to check out the container(s) before buying, especially if you do not know much about the physical aspects of a shipping container.
To buy even one container is a large investment so unless you have money to play around with you might be better off entering into a financial lease called Capital Leases. A company who needs containers can lease them from your company for up to ten years and you will not have to pay the maintenance fees.
What If You Are A Product Company That Needs Shipping Containers To Ship Your Pallets?
Then you may want to buy shipping containers and if that’s the case you must make sure you are buying from a reputable company by checking their online reviews and consulting other product businesses to find out a fair price, and finally if you can check out the containers personally that would be the best. Otherwise, you must find someone who is knowledgeable and has your interests in mind. If you can find containers in closer proximity to where you live or work that would be best.
There is generally a three-level grading system for purchasing shipping containers, new one trip, cargo worthy, and wind and watertight grades and it all depends on why you are buying a shipping container. A new one trip container is called new, but it has actually gone through one trip to get from Asia to the United States. These containers are specifically colored in beige or tan as opposed to those colorful shipping containers you see on the internet or if you live near an international port.
A cargo worthy shipping container is used but in good enough condition to be utilized to carry all sorts of cargo on international trips. As opposed to wind and watertight containers which are retired from the high seas but are checked for holes so they can still be used for other purposes other than shipping. Standard shipping containers come in two sizes, 20 feet long by 8.6 feet in height and 40 feet long by 9.6 in height.
Avoiding Foreign Shipping Container Scams
Here is a typical scenario when dealing with a company in the far-east. You accept the services of a foreign company to buy a shipping container for you. This company then leases your container to a shipping company, and you are offered a 12% return if you want a guarantee or if you dispense with the guarantee, you are told that you will get a higher than 12% return on your investment. You are completely in this Asian company's hands because of course you understand that the far-east is where the market is for cargo containers.
There has certainly been an increase in foreign companies offering too good to be true deals on buying shipping containers and there is a growing upswing of a promise of large returns with no risk for the person investing. There are some national commissions who are warning investors against such financial risks. For example, England’s Financial Conduct Authority (FCA) and France’s AMF are warning investors to stay away from these predators.
Eight West Australian investors were victims recently to shipping container scams. A fake website sold shipping containers to innocent investors who lost almost $55,000. Persons were pulled to the fake websites by advertisements online on sites such as Facebook. After the container is purchased, they are sent an invoice to pay by direct bank transfer but once they give the money there is nothing heard from the phony company again. Some of the victims described how there were demands for more money with justifications of customs clearances and/or insurance fees and delivery charges. Be suspicious if the prices are substantially lower than other sellers and make sure to pay with reliable financial institutions such as PayPal.
To avoid losing money when trying to invest in shipping containers make sure that the website is legitimate. Fake websites look very real because they copy legitimate websites word for word and picture by picture. Look for slight spelling mistakes or price quotes that are too low and unusual methods of payment. Never give money through package sending or other clear scamming techniques.
Buying or leasing a shipping container is similar to the possession of an automobile. If you are buying new you do not have to worry about maintenance costs at least at the start such as a new one trip shipping container. Buying a cargo worthy inspected shipping container is similar to buying a used car that is fairly new and would be worthy of a trip across the U.S.A. A wind and watertight grade container is like a car that is fine for local driving. Depending on how much you use your containers would be the determination if you should buy or lease just like a car buyer. If you need your car for longer distances, it will pay for you to buy one since you would end up paying extra mileage fees for a rental.
Investing in shipping container stocks is a clean way of making money from these sources. No bother with deciding if you should buy or rent. No maintenance or repair fees for you to grapple with. However, if you are a hands-on person you might want to possess the real thing. Each person’s interest is unique with the main common denominator is to make as much of a profit as possible with the least amount of risk.