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Por: Albert Saenz 11月 18, 2020

The importance of SOC containers for Forwarders and Carriers

Different types of rent. Pros and cons.

Silversea counts among its main business objectives to reach out to both domestic and multinational logistics companies in order to optimize shipping costs by offering the end customer the advantages inherent in Shipper Owned Containers or SOC.

As a general rule we find in the international market two types of containers depending on who holds ownership of them.

First, we refer to the shipowners own containers knoocides such as COC (Carrier Owned Containers)

These containers belong to or are rented by a company or shipping line. When boarding is managed by such units, the shipowner is responsible for the forecasting of the equipment and transport service. the COC generate costs known as delays when they exceed the days off granted by the shipping company for return by the customer.

On the other hand, there are also the aforementioned SC containers (Shipper Owned Containers). These containers are the property of the loader and do not generate delays in the case of the return of them after the deadline. However, such containers must be duly declared before Customs.

Silversea, as a company engaged in the rental or leasing of containers to shipping and freight companies, invests as it cannot otherwise be in special equipment taking advantage of ports or geographical areas where there is often a shortage of a certain type of equipment. Therefore, a certain type of leasing shall be established according to the details of the contract.

First, the long-term leasing involves purchase of the unit by the company and does not involve any administrative services for the organization. The objective for the company is to be able to amortize the purchase during the rental period, which does not exceed half the shelf life, about 15 years

The shipping line commits to a fixed number of containers for a given period of time. It should be noted that the longer the period, the less flexibility to reduce the fleet. It is for this reason that operators usually make this type of rental agreement with a repayment clause that entails a payment of a monetary amount to the leasing company.

Second, the short-term leasing comes when there is increasing market demand for a certain type of container. Esta demanda puede ser cíclica o puede ser inesperada; por ejemplo, cuando una de las compañías fuertes tiene una crisis de posicionado de vacíos en el puerto demandante. En estos casos la naviera tiene mayor flexibilidad para ajustar la dimensión de su flota, y así poder evitar contenedores en desuso y long standings. However, this type of leasing is more expensive, as the leasing company invests a lot of money to maintain the stock, as well as the different expenses that result from the entry and exit of the units and the positioning for inspection. For the landlord it is not too profitable an agreement, as you will find short-term income, but you will need to find new customers for use once the lease is over with the shipping company. In this section are also the one way rentals, which are designed for the use of the unit from the port of cargo to any of the previously stipulated destinations. The company must return the unit at the place indicated by the contract once it is emptied.

Finally, and not least, we find the figure of the Master Leasing o Pool

In this type of contract, container company assumes the logistics management of the unit. It involves a setting of pre-contract conditions and a system of financial control between the contracting parties depending on the condition of the equipment at the time of exchange. The leasing company will be responsible for the maintenance and repair of the units, as well as their replacement after the use or termination of the contract. 

This company must work by providing the relevant operational services to the lessee, as it will be responsible for the distribution of the equipment based on the situation of the shipping company. This type of contract establishes an obligation to lease a certain number of containers, where by which the shipping company obtains the benefit of the flexibility of its container fleet. This lease must guarantee it for a certain period. For the tenant there is an obligation to take additional containers in stipulated places and leave them where agreed in the agreement. The shipping company makes a payment fixed by these leased containers, which is usually higher than those of leases for an identical period of time. 

If the tenant needs more units, he will be obliged to pay a pre-stipulated price that will not be conditioned by the market situation at the time the need arises. This type of agreement gives the shipping company flexibility to determine the size of its fleet and prevents vacuum positioning costs from being generated. 

For all types of rental previously described it is necessary to carry out an inspection or survey to determine the current status of the units. This system reflects any damage to the units. The inspector is obliged to forward the inspection certificates to the contracting company of its services. Certificates include any damage that the container may have, the type of merchandise for which it can be destined (worthy charge), the date of manufacture and the manufacturing material among others. 

These certificates will be accompanied by relevant photos, including detailed photos of damage, container number and plates. 

Therefore, and once we understand the operation of the SOC container in its different modalities, we can highlight and as a conclusion the advantages and disadvantages of owning containers or leasing them. 

In the case of own containers, it is cheaper for the shipping company, its manufacture will adapt to your needs, monitor the maintenance and repair of these, and you will be able to print your logos and colors as advertising claim. 

However, as a major disadvantage we can indicate that it requires a fairly considerable economic outbursement. The shipping company will take care of the positioning of the units at all expenses. If the demand for a unit type is significantly reduced, the company must bear the costs that accrue from this inactivity. 

For its part, the advantages of leasing containers are as follows: 

It is easier for the shipping company to adjust the size of the fleet in case there is any diversion of demand, as they will be able to return the units to the leasing company. 

It does not imply the disbursement necessary to acquire the container, since the ownership of the container is not acquired. Maintenance and repair costs can be saved if the rental company is entrusted with these responsibilities at the time of the contract. Efficient balance can be achieved because containers can be loaded at one point and returned at a different point. 

As disadvantages we could indicate that in the event of considerable and immediate growth in demand the shipping company will have trouble increasing the number of leased containers. There is also a disadvantage to the contrary. When demand drops excessively, the shipping company will have to pay a number of penalties to return the units.

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