With over 2M TEU retired from the global container fleet every year, the future is looking bright for traders and resellers
Whether it be a large developed city, a small town in a developing country, a builder’s storage depot lot or even a UK allotment site, one cannot fail to notice ISO marine containers fulfilling important afterlives. After their primary role as transporters of global trade has ended, boxes can also be seen as pop-up restaurants, soup kitchens, shops, community centres, libraries, offices, storage facilities and even houses.
The secondary market for marine containers is serviced by an infrastructure of traders, whose interests are served by the Container Traders and Innovators Association (CTIA), the international body representing container traders and resellers.
The market for second-hand traded containers continues to expand. While reliable numbers as to the size of the market are hard to come by, analysts estimate that between 4% and 6% of the global fleet is retired from active freight carrying services each year. This would have meant approximately 2.2M TEU entering the after-maritime life in 2018, a small percentage of which would have been disposed of for scrap. Over the next five years, the pace of retirement is set to increase, with as many as 2.5M TEU being taken out of cargo operations each year.
While ocean carriers appear to be sweating their assets for longer, and many containers remain in their equipment pools for 12-15 years, this is not the case with lessors. “We find most leasing companies still dispose of their containers in a seven to 10-year time frame, as residual prices tend to be attractive over this period, and that is important from a profitability perspective,” said Patrick Hicks, secretary of the CTIA. “They also want to maintain a modern fleet, as that is more attractive to the lines.”
Dry freight 20ft, 40ft and 45ft containers dominate second-hand sales, due to their flexibility and the multiple uses to which they can be converted. But the sale of refrigerated boxes has been rising. Hicks explained: “Reefers are mainly used for static cold storage purposes, including for holding additional stock during peak retailing periods, as extra capacity for warehouses and for holding buffer pharmaceutical products for hospitals. We see refrigerated containers becoming a more important element of the secondary market in the future.”
By contrast, tank containers and other specials have limited applications in the secondary market. “We see some tanks being traded and used mainly for the industrial storage of liquids,” said Hicks. “Since tanks have been
previously used to transport hazardous chemicals, the industry is well equipped to handle the safety issues.
“Also, tanks are mainly constructed of stainless steel, which has a high scrap value. Companies keep them in service longer – as many as 30 years in some cases – and this also limits their afterlife capabilities.”
Still on the move
The CTIA secretary was keen to point out that the secondary market for containers is not only a non-freight trading environment. In addition to trading, they are used for one-way shipments of project cargo to remote regions, as well as to meet regional container road, rail and maritime requirements.
“We have noticed important developments in emerging markets, for example, in South Asia, Africa and South America, where smaller lessors buy boxes and conclude rental contracts with local traders and transport service providers,” said Hicks. “The market is often too small, too local and sometimes too volatile for the major lessors to chase, so that selling their older containers to these companies is not a competitive threat.”
The growth in the secondary container market has provided significant opportunities for many engineering and architectural design companies. A multitude of highly innovative conversions are available in the market, with ISO Spaces, Adaptainer, Tiger Containers and Wilmot Modular Structures among the largest participants.
Meanwhile, companies that previously focused on repairing containers have branched out and now offer value-added conversion work. Two such companies are ICTC in Antwerp, and Progeco Holland in Rotterdam, whose businesses have expanded to encompass innovative conversion work.
“Wholesalers and traders play an increasing role in the secondary market, and in many respects they have become the main conduit for second-hand container sales,” explained Hicks. “But with many small traders and intermediaries involved, it is important that CTIA focuses on areas where we can add value to their business.”
Specifically, CTIA wants to help the industry set clear and robust standards when it comes to buying and selling used containers. “There has been a steady rise in fraudulent and improper practices, and the number of financial scams uncovered has increased. There are many ‘good and innovative people’ working in the secondary market, and we cannot afford a few bad practitioners to tarnish the industry’s reputation,” stressed Hicks.
The CTIA business model enables membership of reliable traders, big and small. “Fees are now as low as US$1 a day and companies get the benefit of being accredited to a professional organisation,” he said. “We have a wide body of support from lessors, ocean carriers, individual traders and other parties buying and selling containers. That way we offer an expansive forum in which to discuss best practices and deal with the issues affecting the business. This will
help to raise standards further.”
Hicks believes that there are genuine opportunities in the secondary market. He pointed to the growing interest in the work of the CTIA and the sheer number of innovative conversions and applications for containers being discussed at the association’s events.
But Hicks also raised an interesting issue. “The increase in pop-up restaurants, the growing need for low-cost office space, particularly for technology incubators, and the success of containers when it comes to housing/ community living, have raised the profile of the secondary market,” he said. “We now have the opportunity to promote the value and professionalism of the traders behind this expansion, and gain wide acceptance of the multi-use of containers by the public, authorities and industry. We need to understand whether this is a passing ‘fad’ or a fundamental change in the industry. Only time will tell.”
Clearly, freight containers offer architects, designers and planners considerable flexibility and at a low cost. They can be acquired and converted into different uses relatively quickly, and they can be clad, placed and stacked in many
different ways to create interesting clusters for housing, office and even shopping centre developments.
It is also the reason why a large number of manufacturers across the world are using the ISO maritime container template to produce modular designs and applications from scratch.
Ipswich-based Adaptainer has 30 years of experience in selling, hiring, converting and fabricating maritime containers for a wide variety of business and personal uses. The group claims it has supplied its clients with over 50,000 units.
“The portability of shipping containers makes them ideal for projects that require a fast installation time and the flexibility to be able to relocate at any time,” said Jon Clark, co-founder of Adaptainer.
The group has converted containers for use as single houses, offices, event studios, storage units, restaurants, bars and classrooms, as well as being involved in developments that have used multiple numbers of containers in community developments.
Projects stacking up
One of its most significant projects has been BoxPark Croydon, which opened in south London (UK) in October 2016. It is one of the largest containerised food and beverage pop-up malls in the world. Built on two levels, it took
Adaptainer 12 months to build and structurally amend the 96 containers used in the development and to erect them on the 50,000 ft2 site.
Equally complex was Adaptainer’s involvement in the construction of the International Fashion Centre MIF68 in Marseilles, southern France, which was designed by Mathieu Cherel of Abaque Architecture. Opened in 2018, the B2B trading platform for textile wholesalers comprises 95 showrooms/stores, each in a former shipping container, on a 27-ha parcel of land opposite the city’s Grand Littoral shopping centre, close to the port. Overall, it represented an investment of €17M.
In Amsterdam, architect Julius Taminiau has used old freight containers, several of which have been repainted in bright colours, as the basis for a low-budget incubator type Startup Village developed within the city’s Science Park. A total of 150 offices/workshops, including a studio, have been kitted out from containers and are now used by individuals and companies specialising in new technology and scientific ventures.
Clients of Startup Village have a range of office rental options, with the architect having populated the village with single 20ft and 40ft containers and a series of interconnected 20ft units. Most of the offices have windows at each end of the container and these can be opened. Each office is also fully insulated and has an infrared heating device installed.
Taminiau has arranged the containers, which are mounted on concrete tiles, around a central square, which can be used for communal open-air events. Meanwhile, a covered events space has been constructed at one end of the square and is used for lectures, networking parties and other casual events.
In addition, several containers have been converted into coffee bars and meeting rooms, and wooden walkways and stairs have been created to connect the different spaces within the Startup Village. As a finishing touch, the architect has worked with Green Art Solutions to place plants around the square and on top of some of the containers. These plants also act as rainwater buffers and air filters.
Taminiau sees the design, closeknit feel and somewhat quirky nature of the Startup Village as being inspirational, fostering collaboration and instrumental in exchanging information and launching innovative products and services.
The Startup Village complex, which is supported by ACE Venture Lab, Amsterdam Science Park and UvA Holding, is designed to remain in place for 10 years. Elsewhere, charities such as Breadline Africa have been raising money for many years to buy shipping containers and then convert them into facilities that help support their work (see box story, p23).