Why do shipping lines lease containers?

The leading container shipping lines have their global network of services connecting the
major trade routes. They have sizeable fleet of containers of their own to meet their global
business requirements. Nevertheless it is neither operationally acceptable nor cost effective
to maintain 100 per cent own containers to do business by the shipping lines. In order to
ensure flexibility and quickest access to container units in the desired location at the right
time as per demand, many Shipping lines prefer to keep a blend of owned and
leased container available to them.

The carriers might face a situation where they have shortage of containers at certain
locations or they might have requirement of certain types of containers (Flat Racks, Open
Tops, high cube GP 45ft/48ft etc) at certain locations. Necessity to ensure availability of
container units as and when required is the prime consideration for the shipping lines to go
for leasing. Thus Leasing indeed may be an appropriate option for the carriers to avoid the
costs and problem of re-positioning their own units and also capital investment in container
purchase. To respond to the volatile and complex shipping market conditions, the shipping
lines try to maintain their own container stock in the range of 40% to 60% out of total
container fleet.

Container Leasing Companies as the second largest owner group of marine containers, are
playing an important role in developing worldwide network of their dedicated services of
different lease options for the shipping lines / clients to meet their needs of worldwide
containerization. Although leasing is approximately 60 to 70% more expensive compared to
ownership from operational point of view, yet size of container fleet handled by the pioneer
Leasing companies likeTextainer, Pacific Tycoon, CAI International. Triton, Florens
etc show their growing market share in the container leasing business of the world. This is
due to comparative business advantage of different lease options provided by the world
class Leasing companies. Statistics show that in 2009, container leasing companies owned
approximately 41% of the global container fleet and the remaining 59% was under the
ownership of ocean carriers and other transport operators.

Various types of Container Leases

The various types of leasing arrangements prevailing in the container leasing market, are
generally divided into three main categories.

Master Lease

Master lease agreement is unique among the leasing options as it allows a great amount of
flexibility to the shipping line or other lessee. A master lease is established for a range of
containers (maximum and minimum), the duration of term is variable (usually short to
medium), and the collection and return locations are generally more flexible and based on
credits. The leasing company is responsible for the full management of the container fleet
(maintenance and repair) and for re-positioning following off hire and contract termination.
 Under this agreement, the leasing company acts as a logistics service provider as it must
allocate the distribution of its container assets in view of the lessee’s transport strategies.
This type of agreement allows maximum flexibility with regards to the location of the
containers and as such helps the shipping line to plan and calculate their costs accordingly.

Long Term Lease

Long term lease (sometimes referred to as dry lease), is executed for longer periods of time
which varies between five to eight years. The duration of lease is equal to about half of the
useful life of a container. Unlike master lease, it does not involve any management service
by the lessor / leasing company. Long term leasing comprises a fixed number of containers
and has a predetermined re-delivery schedule. Under this agreement, the lessee is
responsible for all sorts of management of the containers during contractual period,
including maintenance and repairs and re-positioning. At the end of the period, the lessee
can either renegotiate the terms for extension of the lease or deliver the container to an
agreed location.

Short Term Lease

Short term lease (sometimes referred to as ad hoc or spot lease) is generally associated
with the lessee’s temporary need for equipment. Its duration may be for one way or round
trip service of a vessel. The arrangement normally takes place when there is a temporary
surge in demand either cyclical or unforeseen. Leasing companies try to avoid having a
large share of their equipment on the spot market as leasing fees are volatile and strongly
influenced by the current market conditions. During low demand periods, the risk exposure
of Short term lease is high due to expected increase in the volume of idle equipment. The
lessee is responsible for re-positioning & repair of the equipment.

Container shipping lines need to build up a container inventory having suitable blend of
owned and leased containers which would help maximum utilization of the equipment for
fulfillment of its growing business commitment. At the same time container units to be hired
under combined policy of Mater and Long Term Lease to obtain maximum flexibility for
optimum utilization of the units as per business plan / strategy of the company.

Container Maintenance and Repair

You own a container and you want it to last forever. We can't do that, but here are some basic tips
to extend the life of your container as long as possible.

Maintenance

 Inspect the container on a regular basis. Even twice a year is great, but as often as you’d like. It
takes some time for problems to get serious, but catching things early is always good. When you
are inspecting the container, look at the floor to make sure they are in good shape. They will
eventually need to be repaired (see below). Look at the walls, roof and doors to see that there is no
rust developing that seems concerning. When it does, you’ll need to do repairs (see below) and
check out the seals on the doors. They should be firmly attached to the doors and close into the
doors well. If not, see below for how to repair them.

 Painting containers. Containers are made of steel and steel rusts. One way to delay that is to
keep your container painted. We recommend an industrial alkalyd enamel. You can find it at
Sherwin Williams or anywhere that sells industrial paints. The paint should not cost much more than
standard outdoor paint. To paint your container, give it a good wash to get all the dirt and oil off. If
there are any rust spots that have you concerned, grind those off right before painting. If your
container still has shipping line markings on it, you may want to consider pulling those stickers off of
the container as well. Once the container is prepped, either use a roller or a sprayer to apply the
paint. Often container yards will only paint the sides, but you may want to also paint the roof. The
paint suggested as a nice shine to it and that should last 10 years if the container is not moving
around. For containers that move around (like in a rental fleet), they will need to be painted more
often.
 Roof rust prevention. Roofs get the most moisture and are most likely to have issues first.
Some people like to protect roofs. There are several ways to do this – applying mobile home roofing
tar or other similar products. There are some fancier options now as well, depending on how much
you want to spend.

Blocking under container

Painted blue container

Painting not only extends the life of a container, it makes it look better
 Container floors are made up of sections screwed or riveted to the cross-members
Repair

1. Doors aren’t shutting right. This is the most common problem in containers. The reason is that if
you load your container, it can shift the way the container is sitting on the ground ever so slightly.
Just ¼” can make opening the doors trickier. The easiest fix to this is to either readjust your blocking
or add a little blocking under your container. You can lift up one corner of your container with a car
jack. Once you have the container lifted, rearrange your blocking (or slip some under there). Be
careful not to put your hand under your container in case your car jack slips. We recommend wood
blocking if you don’t have any. Once you adjust a corner or two, the doors should open more easily.

2. Floors need repair. The flooring of your container is made of plywood. The good news is, this is
easy to replace. They have treated plywood to prevent moisture from coming through, so we
recommend using that as well. The flooring sections are attached directly to the cross-members
under the floor. If you look at your floor, you will see where they are attached. Carefully remove the
flooring section and rivet or screw in the new piece, depending on how your flooring is attached. Be
sure to get the same thickness flooring so your floor stays level.

3. You have a hole in your container. This is a biggie. You can’t let it be or it will get things wet in
the container. If it is a small holes, you can simply weld it shut. This works best for pin holes.
However, if you have something bigger on your hands, then you will need to cut out that section and
replace it with more corten steel. Chances are you don’t have that laying around, so you will
 probably have to call the company who sold you your container to see if they have some they can
send you. Also, this repair requires cutting and welding skills. If you do not have them, hire a welder
to do this repair for you. The area with the hole needs to be cut out, a new piece added in and
welded into place to seal it up again.
4. Your door seals or lockrods are broken. It will happen eventually that you need new door seals.
You can get door seal kits that fit perfectly on the door. You just take off the old seals and put on the
new one. If the lockrods (the piece that goes the height of the door) can bend or break. Those also
can be replaced as well as the keepers that lock the lockrod in place. If you need help with any of
these container parts, let us know.

Door seals, lockrods and keepers can all be replaced

This doesn’t solve every problem, but it should cover the most common problems people have with
containers. If you need more help with your repair, give us a call and we can try to walk you through
a solution or help you find a way to get your container fixed.

Container Tracking
Why do I need Container Tracking?
Container tracking allows you to get precise, accurate information on the location of your freight in
any container, anywhere in the world, anytime.

Who Needs Container Tracking Information?

DOMESTICALLY – anyone moving item(s) of freight which is:
Less than Container Load (LCL)
  A consignment note is your form of container tracking
 Terminology varies between regions

A Full Container Load (FCL)

 A container number is your form of container tracking

 Do you have a full container load of freight?

INTERNATIONALLY – anyone moving item(s) of freight which is:

Less Than Container Load (LCL)

 A Housebill Number is your form of container tracking

 Terminology varies between regions

A Full Container Load (FCL)

 A container number is your form of container tracking

 Do you have a full container load of freight?

If you need to know the location of your freight, why wait? Jump to the top of the page to
use Mainfreight’s tracking tool right now!
Why do I need to use Container Tracking?
Whether it’s FCL or LCL freight, our container tracking online is your ideal solution for keeping
tabs on it.
As the sender (the consignor) your container tracking number will tell you:

 Where your freight is at any given point in it’s movement

 When your freight was delivered
As the receiver (the consignee) your container tracking number will tell you:

 When your freight was picked up

 Where your freight is during its movement ( e.g. depot, port, in transit)

How do I use Mainfreight Container Tracking?

FCL - DOMESTICALLY or INTERNATIONALLY

 Near the top of all of our pages is our track and trace panel
 Enter your container number
 Enter a date during the journey of the container your goods are on (please note, as
containers are moved multiple times in their life, entering your date ensures you’re tracking
the container your freight is moving in)

LCL - DOMESTICALLY

 Go to our container tracking at the top of any page in our website

 Enter your consignment note number (this is your container tracking number)

LCL - INTERNATIONALLY

 Go to our container tracking at the top of any page in our website

 Enter your housebill number (this is your container tracking number)

Find out more about our services and innovative technologies, contact the team at your local
Mainfreight branch
Advantages of Mainfreight Container Tracking
Did you know? With Mainfreight, your container tracking information can be emailed to you and/or
your customer. To do this:

 Go to the top of any page on this website

 Enter your container tracking number (or consignment note or housebill number)
 Enter the email address(s) you want the information to be emailed to
 We’ll email your freight container tracking results to these email address(s)

https://www.sec.gov/Archives/edgar/data/1299064/000119312505065052/dex1017.htm