Investing in Shipping Container Investments

Investing in shipping containers is an investment in economic growth. The worldwide container shipping fleet has the enormous responsibility of transporting more than 95% of the world’s manufactured goods. With international trade ever-increasing in the pursuit of strong economic growth, industry analysts and investors can expect that the steadily rising demand for shipping containers will present profitable investment opportunities throughout 2016 and for decades beyond.

What is a Shipping Container?

A standardized shipping container is a twenty foot by eight foot steel box, that has been constructed to withstand the rigors of intermodal freight transportation by roadway, railway, and waterway.

cargo freight shipping container teu

The use of a standard steel shipping container, also known as “dry freight” or “general purpose” containers, began during the late 1940s and 1950s, when commercial shipping companies and the U.S. government began developing them to bundle cargo into larger, unitized loads; that could be handled, transported, and stored more easily.

In 1955 Malcom McLean purchased the Pan-Atlantic Steamship Company, and proceeded to form the world’s first container shipping company; which later became internationally known as Sea-Land. In 1968, with great success, Malcom McLean began a container shipping service to South Vietnam for the American military.

Outlook For Shipping Container Demand

In order for economies to improve their performance they must consistently raise their gross domestic product. This is accomplished with the help of a steady supply of shipping containers. Cargo containers are needed to accommodate the demands of importers and exporters, and to support the economy’s growth.

To meet the rising worldwide demand for intermodal shipping services, 2015 saw the largest ever influx of container capacity, as the world’s fleet grew by approximately (net) 1.55 million TEU. This astounding figure eclipses the previous record of 1.35 million TEU, established in 2006 and marks the highest inflow of new capacity ever.

shipping container demand 2014-2017

There are not many other industries that grow faster than gross domestic product. With an annual growth rate of 3 to 5 percent [growth] being a pretty safe bet, [container shipping] is fundamentally an attractive growth industry.- Habben Jansen, Hapag-Lloyd

With the intermodal container transporting more than 95 percent of the world’s manufactured goods, it can be expected that the demand for cargo containers will continue to rise through 2016, and well beyond. In fact, the Fitch Ratings Report’s 2016 Outlook: Global Shipping has forecast that container shipping capacity will experience 6 percent growth in 2016, which will nicely compliment their estimate of a 9 percent increase for 2015.

How to Invest in Shipping Containers

Investors make a shipping container investment by purchasing one or more cargo containers, with the intention of leasing them (often with the help of a broker) to shipping companies, so as to earn a residual investment income from the lease of the shipping container/s.

A shipping container investment broker is often called upon to help investors purchase containers for investment, and liaison with shipping and logistics companies.

For more than three decades, investing in shipping containers has been regarded as one of the safest and most guaranteed investment opportunities available. The constant, ever-growing need to transport cargo to and from world markets ensures an infinite need for shipping containers, as well as a steady investment income for investors.