Leasing or Buying Shipping Containers | LOTUS Containers

1. Leasing or Buying Shipping Containers- Which is the Best Option? | LOTUS Containers What hovers most during the need for shipment is- whether I should buy shipping containers or lease them. If the same is the question that baffles you most then reading this article can help you to get a conclusion. Undoubtedly, both leasing and buying are the best of the methods allowing freight forwarders, shippers, industrialists, or builders in acquiring containers. And that’s why both carry their own pros and cons. Since needs and expectations change from person to person, what may be advantages for one may not be for others. In order to decide which of the two will yield a better outcome, you must consider a few points that I am laying down. The below points will give you a deep insight to make a better decision for yourself. Duration: The period for which you need the containers plays a very important role in deciding whether you should go for purchase or lease. If your requirement is for long, let say 10 years or more, then leasing a container and paying monthly rent won’t be much economical. Long term

2. Lease is one such option that allows you to hire a container for a longer duration. But during the past few years, container suppliers are seen stepping backward in providing containers on Long Term Lease. This is due to various risks and losses associated with this. Most of the time either they have to spend a lot in finding those old customers or they do not even get containers back. And hence you may find very few suppliers out there who would be still dealing in Long Term Lease (LTL). Moreover, it’s always advisable to buy shipping containers when you need them for a longer duration so that you can escape from the burden of monthly payable rent. Instead, get the ownership, use them for how many years you want and once their use is over, you can sell them back to your supplier. Yes! There are some container suppliers like LOTUS containers who benefit their customers by offering buyback services to get rid of your unused boxes in return for a fair sum of money (depending on the condition of boxes). Budget: From an operational perspective, container leasing is found to be 60% to 70% more expensive than buying, yet a majority of the people tend to opt for leasing. What makes it so preferable? The answer can be summed up in a single word- flexibility. When you don’t have enough money in your coffer, you should definitely lease instead of buying. That is because when you buy shipping containers, you become the owner. You are liable to pay not only for container price but also for its storage space and repositioning, etc. As containers during the non-transition period would need spaces where you can store them and consequently you will have to pay rent every time you hire storage space in a depot. But leasing doesn’t give you these burdens. When you lease a container, it becomes your supplier's responsibility to arrange storage space. You do not even have to bother with the transportation cost of repositioning. Leasing policy includes the repositioning services as well. No matter at what port you have shipped your container, your supplier will arrange its way if it has worldwide existence. That’s why it is advisable to hire a supplier who works on a global level. Uses: You really need to be clear about your purpose in acquiring those boxes. They have numerous applications. Make sure whether you want them for storage, transportation of

3. cargoes, or for building houses. A clear knowledge of purpose will give you a broader view in deciding the way of acquisition. You can buy shipping containers in two cases- either to use them as storage units or to ship your consignment. Besides these two, if you are looking to play innovative from steel boxes, you can do only after getting complete ownership. Over the past few years, building with shipping containers has gained tremendous attention from people across the world. Be it a house, shop, office, swimming pool, sauna, or anything, one can construct anything out of it. You cannot cut, weld, design, or modify leased equipment. Leasing only permits you to use it until an agreed duration. Leasing does not give any right to use it for building purposes. So, if you are looking forward to constructing buildings out of them, buy them. Location: In some parts of the world like Africa, South America, and the Caribbean, leasing is less attractive. This is because these locations do not have container depots. Lack of depots disables the storage of containers and repositioning of empty containers is a major expense because they have to be repositioned at a high cost to regions of higher demand. Hence suppliers, in order to avoid losses, do not provide containers on lease. While in countries like Germany, China, Australia leasing can yield a good output. You are not bound to only buy shipping containers because depot shortage is not an issue. The availability of depots at every port enables shippers to acquire containers on lease. In fact, LOTUS Containers itself has 300 depots around the world and hence it offers a plethora of leasing options like the One-Way Lease, project Lease, Master Lease Agreement to customers worldwide. Size: For companies who need 1 or 2 containers, then ownership is the right choice. While for companies needing large size, let say 50, then leasing would be more cost-effective. Don’t forget when you get ownership, you have to arrange storage space and bear storage costs. Paying storage costs for 50 containers can cost more than what you would have imagined. Buying is always economical when you do not need too many of them.

4. Conclusion: Based on the above factors you can decide now as which would be better for you. Both are aptly good options but at different points of time. Sometimes leasing can yield better output while sometimes buying will be more worthy. All you need to analyze before jumping into any of the two.