Key factors that ensure profitability in the container leasing business

Key factors that ensure profitability in the container leasing business

Business organizations compete fiercely in the marketplace to stay ahead of the competition, maintain profitability, and cultivate a brand image that speaks for itself. Today’s business leaders run operations globally, display exemplary leadership traits, build competitive advantage, steer success across different verticals & industries and foster excellent customer relationships.

Containerization has set in motion a well-regulated flow of goods across the globe. The simple “steel box” has transformed world trade on such a scale that it enjoys a niche position in the realization of today’s truly global marketplace for industrial products, consumer goods and agricultural produce.

Container leasing involves signing an agreement with a lessor who commits to supply a certain number of containers to a lessee with the understanding they will use it for a specified time at a specified price and return them on the expiry of the lease period. The lease agreement will document the rental and other terms & conditions agreed upon.

Container leasing is profitable, but as is the norm in any business, it pays to play by the rules of the game, practicing meticulousness and honesty in all dealings with customers and regulatory authorities, together with nurturing an open and constructive relationship with all stakeholders.

What are the prime factors that determine success and profitability in the container leasing business?

Optimum use of capital investment with cost control measures
The cost of container ownership during its useful service life depends upon several factors. The foremost is the cost of purchasing new containers. Being aware of the industry trends can help a company stay alert and invest in new containers when the prices are competitive compared to the lease rental to be earned. With that comes the cost of financing the purchase where the interest rates and repayment period have a direct implication on the profit margins. The other costs are insurance, operational cost and maintenance & repair. A substantial income will be realized upon the sale of the containers retired from service.

Develop revenue-earning avenues
The rental rates generate a regular source of revenue and determine how quickly a company can recover the cost of a container. The rental rates must be commensurate with industry standards. The lessor should prevent wasteful expenditures on their repositioning and maintain the containers in a timely manner to prevent exorbitant repair costs later. Leasing companies should not leave containers idle longer than necessary as they do not generate revenue and at the same time cause avoidable storage expenditures.

Listen proactively and act upon customer requests
Lessors should develop and maintain a reliable network of connections with actual and potential lessees. The lessor who reacts quickly and consistently to the lessee’s requests will often be the one to win the business.

IT tools to enhance work efficiency
The right software will enhance the overall work efficiency of a lessor. Implementing a robust software application for daily functions will lead to reduced workforce needs. Communication with lessees and stakeholders will become smooth and effortless. The user has immediate access to age-wise and specification-wise inventory and can transmit release authorizations on the fly.

iInterchange Systems / offers software solutions on SaaS and “On-Premises” model. Their industry knowledge, technical proficiency and focus on customers’ needs make them the right people to collaborate for the software needs of container lessors, depots and terminals. iCORAL, a holistic ‘cradle-to-grave’ container lessor enterprise solution from iInterchange executes all functions of container lessors and delivers ideal levels of workflow efficiency. iTRADE from iInterchange delivers an optimized solution for the key functionality of a container lessor business.

iInterchange offers iCORAL via “On-Premises” model by licensing and iTRADE either “On-Premise” or even on the “Cloud” via subscription model.