Have you ever wondered why shipping container prices fluctuate? How can you tell you are getting value out of your purchase?  We often have customers who purchase a shipping container and wonder why when they come back to purchase again the price has changed.  There are many factors that drive shipping container costs. Some of which you can control with your purchasing decision and some cannot.  

Quality – The Quality of the container is a big factor.  Shipping Containers range in age from nearly new or one trip containers, to 20 year old used shipping containers that are no longer suitable for ocean going shipping transportation. Typically age and quality go hand in hand but that is not always the case.  This is a factor you can control by asking your sales rep what condition the container is in. The container industry has come up with some standards that will help you make a value decision.  We have written a separate document that will detail this. Feel free to visit this document: Container Conditions Explained

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Location –  One of the biggest factors in container pricing is location. Some areas depending on the market conditions always have more containers available.  These are known in the shipping industry as “surplus markets” Bargains can be had in surplus markets where competition and ongoing storage costs will drive the price down.  What factors drive the pricing? Some regions have strong export demand vs import demand so more containers are needed for export. These are typically industrial areas with concentrated population and high import distribution demand.  Geographically location for surplus markets are typically coastal or near an inland connected waterway. You will find drastic fluctuation in pricing in these areas based on time of year and economic market conditions. The opposite location factor is in “deficit markets”  In these areas export demand is high and import demand is low. These markets geographically are typically non coastal, inland with no connecting waterways.

Demand in the Shipping IndustryBeing that your container was not made to be sold to you for storage you need to understand that the market conditions related to this intended use – Shipping will adjust the pricing you will pay not your market condition setting the pricing.  This aspect is by far the #1 factor that will influence pricing with other factors being held constant.

Global economic factors will determine how many containers the shipping lines need to distribute trade throughout the world.  If fewer containers are needed the shipping lines will off hire leased units to the open market and the leasing companies will sell them and will reduce the size of their owned fleets rather than paying storage on the idle shipping containers.  

Container Factory Pricing – The price of a new shipping containers drives the used market as well.  Factory pricing will fluctuate based on steel replacement cost at the factory, labor costs, and demand.  Increased demand for factory orders is typically influenced by trade growth, and replacement costs for infleet containers.

Maritime Shipping FactorsThe cost of oil will influence how fast the ships will travel affecting how many containers are needed to produce the trade produced by the global economics efficiently.  The size of the container ships has also influenced how many containers are needed to fill the slots required to drive these large vessels. Ship size has increased from 2,950 twenty foot equivalent (TEUs) to an astonishing 22,000 TEUs in 2018.  

Screen Shot 2019-05-02 at 11.39.37 AMVolume –  LIke most products you can get a better deal by buying in volume.  You will pay less if you buy in quantity. The quantity discount is typically $50-$250 based on the quantities you are purchasing in.  Make sure to mention up front if you are looking for multiple quantities, this factor will affect your pricing.

 

 

Hopefully this information will help you understand the factors around container costs.  If you have any questions please contact us at 800-386-2456.

 

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