Unit 5 cab

Unit -5
Alternate uses of containers -marketing of used containers -carriage of shipper own
containers - multimodal transport options for containers -Insurance for containers -
strategies for managing container imbalance
Prepared by Prof.Harris Kumar

Storage Container Pricing
At some point, your business may have need for temporary storage. For some, a like-new container
is important. To others, as long as it’s waterproof and wind-tight, a little rust or faded paint is no big
deal.
When it comes to shopping for a shipping container, you will quickly find that there is a wide range in
price. Containers can cost anywhere from $1,400 to $5,000, depending on a number of factors.1usd
=73.80 INR
Price and Condition
 To find the right container for you, it’s important to understand the relationship between price
range and a container’s condition. Generally speaking, the newer the container, the higher the
price. But not always. In some cases, an older container could be in better condition than a newer
container if: 1) it has endured less wear and tear, 2) has little noticeable damage or, 3) has been
stored in better conditions.
 Factors That Affect Price
 Size ,Age ,Condition ,History ,Cost of delivery Permitting fees ,Customized features

3 Container Price Points
 If you are looking for a bargain and are the do-it-yourself type (or know
someone that is), the handyman container (also known as an ’as is’ container) is a
great option. These containers can have an extensive amount of damage, some
more than others. The more damage, the cheaper it will be.
 You can find handyman containers for as low as $1,400. Handyman containers
may have mis aligned doors, holes, rust, dents or floors that have been damaged
by chemical spills.
 If are looking to save some cash and don’t mind taking on a project, this is the
right container for you.

Contd..
2. Middle-of-the-Road
 If you are looking for a quality container at a reasonable price, then renting or
buying a used container might be the best way to go.
 Renting
 Renting a container is a popular option for many businesses. It’s an easy, affordable and
convenient way to temporarily store large amounts of stuff. At the end of the day, not
many people want to own a huge steel box. The major perk to renting is that once
your’e done with the container, you can call someone to take it away.
 If you rent from a local supplier, expect to pay anywhere between $75-$200 per
month, depending on the size, features and condition of the container. Again, the
advantage of renting is that when you decide you’re done with it, you can call someone
to remove it. Some suppliers also offer a maintenance service or a liability waiver in case
your container is damaged.

Contd..
Buying Used
 Know this: there are plenty of used containers out there that are in good condition.
As long as the container has not been severely damaged, it will do what it’s meant
to do: protect and store your stuff. Containers are made of COR-TEN steel and are
designed to last. Buying used, means you get a durable product at a reasonable
price. Used containers for purchase can cost anywhere between $1,400-$2,600,
depending on the size and condition of the container.
 Talking to you local supplier is key when buy a used ISO box. They know the
industry and what is available in your local area. They can talk you through things
like permitting, delivery needs, and features that would be a great fit for your
business.

Contd..
3. Most Expensive
 If you are looking for a high-quality container that has never been used and are
willing to pay full price, a ‘one-tripper’ is the right container for you. One-trippers
are containers that have been manufactured and shipped directly from China,
carrying their first load of cargo.
 New containers cost anywhere from $3,000 to $5,000, depending on the size,
features and market price. Many suppliers offer new containers for purchase, so be
sure to ask. Learn about the In’s and Out’s of Buying a storage container.
 New ISO containers are popular among industries that plan on using the containers
for frequent transport or storage and require the newest, most structurally sound
units available.

10 Amazing and Innovative ways to use a
Shipping Container
 https://www.johngood.co.uk/2017/06/23/10-amazing-uses-shipping-container/

Used Containers price
 https://dir.indiamart.com/impcat/used-shipping-containers.html

Shipping Container Market Statistics – 2027
 The global shipping containers market was valued at $8.70 billion in 2019, and is
projected to reach $12.08 billion by 2027, registering a CAGR of 4.3% for the
forecast period 2020-2027.
 A shipping container is a container with strength suitable to withstand shipment,
storage, and handling. These containers range from large reusable steel boxes
used for intermodal shipments to the ubiquitous corrugated boxes. The
containers are a means to bundle cargo and goods into large unitized loads,
easily handled, moved, and stacked, and can be tightly packed in a ship or yard -
similar to cardboard boxes and pallets. They are generally made up of aluminum
and steel. The size and type built of each container comply with specifications
and regulations formulated by the International Organization for Standardization
(ISO).

Contd..
 China entered into the shipping container manufacturing in 1980 with the formation of
CIMC in Shenzhen, China, but only gained its greatest momentum beginning in 1993.
Not only was China’s low cost of labor an issue, but was also becoming the largest
producer and recycler of steel. Till 1995, Taiwan, Hong Kong, Japan, Korea, and most of
Europe were producing their shipping containers in Mainland China. Since 1996, CIMC is
the largest manufacturer of ISO containers in the world, and by 2007 China produced
82% of the entire world supply of ISO shipping containers. Now, there are many small
companies in China that fabricate the ISO certified containers.
 Factors such as increase in demand for cargo transportation through ships and rise in
trade-related agreements supplement the growth of the shipping containers market.
Moreover, fluctuations in transportation and inventory costs hamper the growth of the
shipping containers market. However, factors such as anticipated trend of automation in
marine transportation and increase in marine safety norms are expected to
provideopportunities for the growth of the shipping containers market during the
forecast period.

Contd..
The global shipping container market is segmented into container size, product
type, end use, and region. By container size, the shipping container market is
categorized into small containers (20 feet), large containers (40 feet) and high cube
containers (40 feet). By product type, it is divided into dry storage containers, flat rack
containers, refrigerated containers, special purpose containers, and others. By end use,
it is classified into food & beverages, consumer goods, healthcare, industrial products,
vehicle transport, and others. By region, it is analyzed across North America, Europe,
Asia-Pacific, and LAMEA

Contd..
Increase in demand for cargo transportation through ships
There is a rise in demand for the transportation of cargo through water ways. This is
because the number of cargos are efficiently transferred to the other end in a securer way as
compared to other means of transportation. Moreover, cargo ships are less expensive for
shipping goods as compared to road and air transits. Ships can carry more cargo from one place
to another within a short span of time. As per the records of UNCTAD, approximately 1687
million tons of cargo is transported every year in around 177.6 million containers covering 998
billion tons-miles.
Rise in trade-related agreements
Numerous trade related agreements have been carried out between the developed and the
developing nations to transport goods from one place to another. This has enabled the
suppliers to choose water ways as a better and efficient means of transportation. This increased
inclination has led the cargo container manufacturers to develop better and efficient containers
of different shapes and sizes. This boosts the growth of the market. Also, free trade agreement
has enabled a reduction in duties and taxes.

Contd..
Fluctuations in transportation and inventory costs
Carrying goods from one place to another requires a suitable mode of
transportation, which means there should be an efficient usage of the medium. The
cost incurred in transportation and holding inventory is another important factor that
has a negative impact on logistics. Price is the most significant factor that affects the
overall logistics services from the first function till the goods are delivered. This
continuous fluctuation in transportation and inventory cost of the material has
affected the shipping industry by enabling the customers to opt different methods to
transport the goods, which eventually suppresses the growth of the global shipping
containers market.

Contd..
Anticipated trend of automation in marine transportation
The steps toward automation and giant companies demonstrations of autonomous
ships has enabled various countries for joining hands to develop automated vessels to
be used in passenger and cargo transportation, which eventually leads to the growth of
the shipping industry. For instance, Rolls Royce and Finland based ferry operator
Finferries demonstrated the world’s first fully autonomous ferry. Also, Norwegian built
Yara Birkeland is a fully autonomous container ship, which is intended to carry
containers and is to start working in 2020. In addition, Norway based Kongsberg
partnered with Yara is planning to develop all electric vessels by 2020.

Key Benefits For Stakeholders
 The overall shipping containers market opportunity is determined by
understanding profitable trends to gain a stronger foot hold.
 The report presents information related to the key drivers, restraints, and
opportunities of the global shipping containers market with a detailed impact
analysis.
 The current market is quantitatively analyzed from 2019 to 2027 to benchmark
the financial competency.
 Porter’s five forces analysis illustrates the potency of the buyers and suppliers in
the industry.

Multimodal and Intermodal Transport Mode
Choosing between Multimodal and Intermodal transport is important for
Shippers to optimize routing and total shipping costs. Sometimes a combination of
different transport carriers is better to achieve best total shipping cost, but it requires
more logistics coordination. Using only a single carrier may achieve the best routing
and require less paperwork. Understanding the difference between Multimodal and
Intermodal is important when choosing a carrier for your cargo, but the terms are
sometimes used incorrectly or interchangeably.

Multimodal transportation
Multimodal transport (or combined transport) is per definition a combination of
at least two or more different modes to move your cargo from a place in one
country to another country. The main characteristic of multimodal transport is that
even though it includes various modes for transportation, it still falls under one
single bill of lading. That means the carrier is fully liable for the entire carriage even
though it is performed by different modes of transport such as Air, Rail Road or Sea.
A good example for multimodal transport is Rail-Truck. Carriers like DHL or UPS
are offering such a solution for example along China’s Belt-and-Road initiative for
goods to move from Asia to Europe. Another example is Sea-Air which is less
expensive than air but quicker than shipping only.

Contd..
When shippers choose multimodal transportation for their cargo, it means that an
agent or the carrier is responsible for the entire journey. Having only one contract
minimizes coordination and communication expenses for you as a shipper, especially if
something goes wrong which leads to high efficiency in delivery time. With Multimodal it is
easy for you to track your containers because you only use once tracking interface instead
of several ones. Access to remote parts of the world with responsibility and liability of the
movement with only one carrier is another reason to choose Multimodal transportation.
Multimodal is considered to be a timelier, cost-saving shipping resource.
For instance, take a freight between Hamburg to Shanghai under Multimodal
transportation. After the cargo is packed in the containers. the carrier sends their own
designated trucking company to pick up the containers in Hamburg and bring it to the
Hamburg Port and after it can been brought to Shanghai, it is then brought to its final
destination again by a trucking company that works under the carrier. The carrier takes full
responsibility from the point of pick-up to the drop-off at the final destination. One
contract serves the entire stretch.

Intermodal transportation
Intermodal transportation is a combination of two or more modes of transport
in order to move cargo from a place in a country to another place to a different
country. The main characteristic of intermodal transport and the biggest difference
to multimodal transport is that every part of the process it is contracted with a
different provider.

Contd..
Let us use an example that includes rail, truck and ship! Someone (maybe you)
wants to move cargo from Munich to Singapore. In the beginning, a truck (hired by
you) would bring you an empty container to pick up the cargo. Once you fully loaded
the container with freight in Munich, the truck takes the container to a railroad yard to
move your container to Hamburg. It is then put on a container ship; your carrier takes
on full responsibility until your shipment reaches Singapore. At the destination, a truck
( also hired by you) picks up your container from the container terminal and delivers
your cargo to you (the consignee) where the containers are unloaded. In this case, it is
an Intermodal Operation as it involves several contracts, between different transport
service providers (truck, rail, sea) and between the buyer and seller.

Contd..
With Intermodal transportation, you can choose carriers on your own and
leverage the lowest possible rates for each transport. It gives you better access to
equipment and good control over transit schedules capacities. Looking at
sustainability you can even choose environmentally friendly options to reduce CO2
emissions. Intermodal increases your flexibility, especially with handling, loading and
unloading cargo at different ports.
When doing intermodal transportation, it is easy to chase the best terms
separately with each company. However, this means more overhead for shippers, as
they need to keep track of several contracts with different providers. The shipper is
also responsible for handling the coordination of delays, as one company will not be
aware of the delays that another company might be having.

Is Multimodal or Intermodal better for you?
If you choose multimodal transport, it means that you sign a contract with only one
carrier that covers the entire journey of their shipment, regardless of the number of
transport modes involved. The contracted carrier issues a Combined Transport Bill of
Lading or a Multimodal Bill of Lading. The advantages include:
 The ability of the shipper to hold one carrier liable for the movement of their
freight
 One contact for tracking a shipment
 One responsible entity for meeting delivery requirements
 With intermodal transportation, you sign multiple contracts – one with a freight
forwarder or ocean carrier, one or more with a trucking company, and one or
more for rail transportation

Contd..
Both Intermodal and Multimodal transport have their own advantages and
disadvantages with only one thing that sets the two transport modes apart: For
Multimodal you sign only one contract, for Intermodal more than one. The two modes
of transport optimize delivery times, reduce inventory costs and keep the level of
freight costs under control. However, many people tend to lean towards multimodal
transportation because it can provide shippers with a timelier, cost-saving shipping
resource. Multimodal freight can also be easier to manage since it is through a single
contract, unlike intermodal that is covered by various contracts. Intermodal shipping
can provide shippers with lower costs and more predictable pricing, but obviously
needs more effort to control and manage.

Types of cargo insurance
It’s common knowledge that conditions out at sea may get rough, which is why
many freight forwarders emphasize on the importance of properly packing and
securing your shipment. But given the unpredictability of mother nature, shipments
are never entirely safe.
Your lashes are securely in place, your pallets are properly stacked, and your
weight distribution is right. You’ve packed and secured your shipment by the book
and so well that you’re thinking about teaching a 101 course on how to prepare your
shipment. The container door shuts, and off it goes on its oceanic journey.

Why cargo insurance is important
While it’s good (and highly recommended) to take all the preventive measures
you can to prevent your shipment from getting damaged, there’re always other
factors beyond your control. Unpredictable bad weather conditions and the lack of
proper packing by other shipments on board the vessel your cargo is travelling on
(for LCL shipments), for example, can easily damage your cargo. The fire that broke
out on board the Maersk Honam earlier this year should serve as a good example.
In ocean freight, it’s always better to be safe than sorry, and one way to do so is with
cargo insurance.
All shipping lines are legally obliged to provide coverage for the cargo they
transport on their vessels. But this coverage is very limited, and it’s advisable to buy
additional coverage to fully protect yourself.

Different types of cargo insurance
Think of cargo insurance like your health and/or life insurance. As you can
imagine, there are plenty of cargo insurance you can choose from, each with its own
coverages and limitations.an overview of the more common types of cargo
insurance and their coverages.
Land cargo insurance
Land cargo insurance, as its name suggests, covers your shipment when it’s
being transported on land. This is generally when your cargo is on board a truck but
also applies to when it’s being transported or managed by other utility vehicles. This
insurance is domestic and coverage is only applicable within the country.
Coverage: Theft, damage from collision, and other risks.

Contd..
Marine cargo insurance
Marine cargo insurance covers the sea (and air for air freight) leg of your shipment’s
journey. Unlike the land cargo insurance, this applies to international transportation.
Coverage: Damage from loading/unloading, bad weather, piracy, and other risks.
Marine cargo insurance policies are either renewable or permanent. If you’re not a
frequent shipper, it’s better to choose the renewable policy as it applies to one-time,
single voyages. These tend to be relatively inexpensive and can end up saving you a
considerable sum. As for frequent shippers, a permanent policy will cover you for a
determined period of time regardless of the number of shipments you’re sending.

Types of cargo insurance coverage
Cargo insurance coverages include shipment transportation via water, air, road,
and rail. But to what extent you’re covered will depend on the type of policy you
choose. Pay close attention to the details of your policy and clarify any doubts you
may have with your insurance provider before signing the document.
All risk
The all risk coverage offers one of the broadest types of coverage with a wide
range of protection against external factors. In general, it covers most types of
physical losses and damages as a result of the external causes a merchandise may
encounter. This is usually for what’s deemed as “approved” or “general” goods, which
are goods that are new and not easily susceptible to losses and damages.

 https://www.youtube.com/watch?v=2JcHMhtH6_s

What’s excluded:
 Damage to cargo as a result of negligence. A good example of this would be
knowingly shipping time-sensitive cargo to a port that’s known to constantly face
congestion problems.
 Inherent vice. This refers to the deterioration of cargo due to its inherent nature
instead of external factors. One common trigger for this clause is the shipment of wine
and beer as the quality of such products may be affected due to movements and
temperature changes during transit.
 Customs rejection
 Cargo abandonment
 WSRCC. Also known as war, strikes, riots, and civil commotions.
 Loss of use/market. This applies when the damaged cargo causes profit losses.
 Failure to pay/collect. Loss of goods as a result of non-payment will not be covered.
 External factors including but not limited to: earthquakes, war, pollution, infestation,
etc.

Named perils policy
The named perils policy is also formerly known as the “Free of Particular Average”. Unlike
the all risk, it covers only the losses caused by the perils specifically named in the policy.
So it’s generally more limited. This policy can include:
 Vessel collision
 Vessel sinking
 Derailment
 Bad weather
 Non-delivery
 Fire
 Earthquake
 Theft, etc.

General average
General average is a maritime concept that, depending on the outcome of the
condition of your cargo following a peril at sea, could anger or relief some.
Under general average, all losses from damages caused during an unforeseen
problem at sea are to be divided among owners of the surviving merchandise on board
the same vessel. Meaning that as the owner of a cargo that has not suffered damages,
you’re liable to fork out financial compensation to the owner whose cargo has been
damaged or lost and/or the shipping line for damages to the vessel.
By default, general average is not covered under any of the types of cargo insurance
mentioned above and need to be specifically included. If you’re thinking of skipping this,
we’d recommend you to think twice. According to statistics, general average claims
happen every 8 years. Now while that doesn’t seem too frequent, you really don’t want to
be stuck with general average and have no coverage, especially given that general
average cases can end up costing hundreds of thousands of dollars and take years to
resolve.

Balancing out the Container Imbalance
Container imbalance is a continuous issue in the shipping industry where not
only container imbalance charges (CIC) and loss of profit is on the line. A nervous
market can make the imbalances more unpredictable.
Imagine, that you are looking for containers for your customers to ship
commodities. But you can’t seem to find any available containers taking that route –
at least not at a price you are willing to pay. It is probably also not the first time you
encounter this issue. The container imbalance is a phenomenon affecting the
container shipping industry across continents.

Contd..
 In the perfect world, a container being shipped would already have shipments
waiting to get loaded. The container would then be on its way back, full of freight.
That is, however, not how it works in the real world. It’s a simple matter of a supply
and demand chain that creates container imbalance.
 Every third container being shipped from Europe to Asia is empty. That can be due
to the lack of import in Asia. It can also be because of a lack of export in Europe to
keep up with the number of containers arriving at the ports. This mismatch of
import, export, and expenses are all components in the worldwide container
imbalance.

Corona worsens container imbalance
 With China as a manufacturing hub, they are together with large areas of Asia often
faced with a deficit of containers. Large amounts of commodities need to be shipped
to Europe and the U.S. At the same time Asia has an export that exceeds their import.
They therefore often don’t have enough containers available. When the containers
then arrive in Europe and the U.S. they pile up at the ports and storages, as the
import these places exceed the export. This produces a surplus of containers. A
tendency that is assumed to grow, and thus creates a container imbalance across the
industry.
 At least, that was how it used to be until the coronavirus began spreading. According
to the Container Availability Index (CAx) containers have started piling up in China.
This is leading to congestion at Chinese ports as well as interrupting sailings. All these
tendencies create equipment shortage in Europe and the U.S. where especially 40ft
containers are stuck at ports in China. In effect, turning the container imbalance and
the market upside down. A market that is still waiting to see just how big an impact,
the coronavirus will have on the industry.

Contd.. Heavy costs
 It’s far from cheap having empty containers sitting around, nor is it inexpensive to move
them from port to port. Due to the container imbalance, around 10 percent of
the global container assets are empty containers. They also account for around 20,5
percent of port handlings around the world. The costs of repositioning all these empty
containers amount each year to between $15 billion to $20 billion across the industry.
 Repositioning empty containers happen in the search of finding freight to ship.
However, to get these empty containers moved between countries, where there are
container imbalances, can be a costly affair. Among those charges, the container
imbalance charge (CIC) can make your life expensive. CIC is a fee a shipping line charge
when they relocate large quantities of empty containers. The charge works as
compensation for the cost of moving the containers.
 Relocating the containers also include extra costs for drayage, transhipping at the
terminal, and empty warehousing when the containers wait to be relocated. All these
are expenses for an empty container, that doesn’t give much of a return.

Equipment sourcing despite container
imbalance
What can you do if no containers are available because of the container imbalance
between Asia and Europe? You have to choose between two container types; SOC
containers or COC containers.
If you ship into a deficit location, the carriers should be more than willing to have
more equipment available at that location. In that case, you should also be able to get
their equipment at a good rate, making COC the better choice for you.
But if your shipment goes to a surplus location, the carriers and container owners
might charge a higher price. They have no interest in paying for storage and
repositioning of your containers in the port of destination. If you still want to go there, it
might be easier to bring your own container, so the owner doesn’t have to deal with it.

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