December 8, 2022
The cost of everything is going up - including the cost of containers and ships themselves. Companies wanting to lower the cost of shipping are more commonly considering leasing containers and ships as opposed to buying. Rather than having to take out a loan with interest, you can pay for containers and ships in smaller monthly instalments. But of course, there are pitfalls to leasing. This article explores the cost-cutting benefits of leasing containers and ships, as well as delving into some of the downsides that are worth being wary of.
Several companies allow you to hire out shipping containers. You pay in monthly instalments for however long you want to rent out the container. The best container lease companies have a range of containers to choose from including containers of different sizes, open top containers and refrigerated containers.
When leasing containers, you can often pay cheaper monthly rates than if you were buying a container using finance. Leasing can be particularly worthwhile for short-term needs (for example, if you only need containers for a few months). You also have the flexibility to switch between different types of containers every few months if the type of cargo you ship is likely to vary.
Leasing can be more expensive if you need a container long-term. When you buy a container, you can eventually pay the cost of it off. When leasing a container, this doesn’t happen, and you continue paying for it until you trade it in. You also don’t have the option to sell a container that you lease. On top of this, there may be restrictions as to what you use your container for (you cannot convert a leased container into a container office).
Ship leasing has become more popular in recent years. Instead of owning boats, you can rent out boats on a monthly basis. As with containers, you can lease out a range of different ships for all kinds of flexible terms depending on the company you choose.
Buying a ship can come with huge upfront costs that can be avoided if you lease. Monthly payments are also often lower when you lease - especially when it comes to newer ships. If you’re likely to need a ship for a short-term duration, you could save a huge amount of money. Ship lease companies will also often pay for maintenance and repairs as part of the deal, plus leasing is often tax deductible.
Leasing some ships may result in you paying more in the long run. Most owned ships are paid off within 10 to 20 years, so if you’re leasing longer than this you’ll likely pay more. You also have more flexibility to modify a ship that you own, plus you have more control as to what you use it for (leased ships typically have to be used for a specific purpose). There is also the option to sell a ship you own, whereas you don’t get any money for returning a leased ship.
Leasing is generally more cost-effective short-term, while buying containers and ships on finance can be more cost-effective long-term. You may be able to more easily access newer containers and ships when leasing, and maintenance may be covered. However, you cannot sell something you lease, and there may be restrictions when it comes to usage.
