With more than 30 years in the container industry, Florens operates a fleet of 3.7 million TEUs. They have a wide selection of dry, refrigerated and special appliances. Headquartered in Hong Kong, they serve a network of branches in America, Europe and Asia, with 160 employees. Florens is a wholly-paid subsidiary of COSCO and has a utilization rate of 98.8%. All the top 30 shipowners are their customers with Maersk with the largest share followed by MSC and COSCO. Size matters… and container leasing companies know that there are new manufactured containers are also being purchased by leasing companies. In 2017, they were the buyers of 55% of new container purchases. The shipping company also finishes the containers to better manage their balance sheet. If loan interest rates are higher than current credit rental rates, it may be useful to invest available capital in ships rather than in containers.
Or if more containers are needed and the company wants to limit the risk on its balance sheet, they can opt for operating leases that appear only in the profit and loss account and not in the balance sheet. Owning is more economical if you need containers for an indeterminate period, you need to use them frequently, adjust them one way or another and maybe not need them too much. In the event of frequent use, we also assume that demand is constant and is expected to remain at this constant level. For example, airlines strive to cover the risk of fluctuating demand, both through ownership and leasing. Founded in 1989 in San Francisco, CAI International is a complete transportation solution. They cover intermodal containers for each mode of transport. Container Applications International (CAI) has 1.5 million standard and special containers worldwide. They offer their customers leasing, equipment and container sales with a focus on North America. The company employs more than 100 people. The tenant who signs the lease is not binding: he is not obliged to actually use containers and as long as he does not collect containers in a depot, he pays nothing.
It is only when the tenant actually picks up a container from a deposit that the contract comes into effect. The tenant bears the costs of repair, maintenance and repositioning. Although definitions vary, most leasing companies define long-term leases between 5 and 8 years. Containers are generally brand new and many long-term leases have a negotiable clause. This clause allows for the negotiation of rental prices after a few years, taking into account depreciation and market volatility. From an operational point of view, the rental of a container costs more than the property, about 60% to 70%. Yet there is a large leasing market, with about 40% of the world`s container fleet owned by leasing companies. This gives flexibility to the taker and some leases allow the tenant to leave the container to the destination rental company.