Container Leasing - Catalyst to Growth Presented by: Captain Somesh Batra Chairman Marine Container Services (India) Pvt. Ltd.
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Container Leasing - Catalyst to Growth
Presented by:
Captain Somesh BatraChairman
Marine Container Services (India) Pvt. Ltd.
What WE do
Core Operating
Areas
Ship Agency Container Repairs &
Storage Depot Management
Port Representation
Total Freight Solutions
& Distribution
Systems
Chartering &
COAs, Offshore
Ship Manning &
Management
Port Captaincy &
Cargo Supervision
NVOCC &
Multimodal Transportation
Container Leasing
Introduction
Total number of container ships: 5,950+
Container capacity of these ships: 18 MN TEUs+
Order book: 483 Ships
Container capacity of these ships: 3.6 MN TEUs+
Growth in % 2013 2014 (p)
GDP 3.2 3.4
Trade Volume 2.92 4.94
Container Shipping Volume 4.77 6.12
Container Shipping SnapshotWorld Maritime
Source: Dynamar, IMF, Clarkson
WORLD 641 MNWORLD 641 MNAmericaAmerica
EuropeEurope
AsiaAsia ChinaChina
IndiaIndia
Global Container port demand 800 MN TEUs per annum by 2017
Global Container market demand to grow @ 6 % per annum in 2014-2016
Global Container Throughput 2013World Maritime
India MaritimeProjected container handling capacity-2020
Upper West Coast
12.312.3Central West Coast
Lower West Coast
Chennai, Ennore, Tuticorin
Total 33 MN TEUs
Kandla, Mundra, Pipavav, Hazira
Mumbai, JNPT, Dighi & Jaigardh
New Mangalore, Kochi, Mormugao, Vizhinjam
Lower East Coast
Central East Coast
Upper East Coast
Paradip, Haldia, Kolkata, Dhamra,
Kulpi
Vizag, Gangavaram, and Krishnapatnam
2012-13N. Sheva 4.60Mundra 2.40Chennai 1.40Pipavav 0.70Kolkata 0.60Others 2.07Total 11.77
IndiaThe Growth Drivers
FDI - PPP
International & Regional Trade
Coastal Shipping - Domestic
Inland Waterways
Exports & Manufacturing
Logistics Parks
Dedicated Freight Corridors
Efficient Food Supply Chain
New Ports & Container Terminals
Container Leasing
Container Leasing
50% of the world container fleet is owned or managed by Lessors
Lessors infuse Capital:
Allowing lessees use their resources for core activity i.e.:
Purchase of assets like Ships, Wagons, Trucks, Terminal, CFS, Infrastructure requirements Etc.
Provides logistics & operational flexibility to Lessees
Lessors assist during seasonal peaks( & troughs) , unplanned moves, additional surge in business & unforeseen Logistics bottlenecks like congestion
Ensure High International Technical, Safety & Maintenance Standards with well trained M&R professionals in Depots Worldwide
A Necessity
Classifications of Leases
2 - MajorClassification
(1) Finance
Like a hire purchase scheme wherein containers can be ordered to Lessee specifications & ownership transferred to Lessee at the end of a 3 to 10 year term
(2) Operation
• Long Term Lease
• Master Lease
• Minimum Days Lease
• Short Term Lease
• Round Trip
• One Ways
Container Leasing
Leases can be tailor-made to Lessee’s requirements
Global Container Fleet & Lessors’ Share (MN TEUs)
31.2532.9
34.35
13.9515.65 16.75
0
5
10
15
20
25
30
35
40
2011 2012 2014
Container Fleet Lessors Share
45 % 48 % 49 %
Source: Dynamar & World Cargo News
Container Leasing
Top 10 International Lessors – Inventory in ‘000 TEUs
Source: Dynamar & World Cargo News
BOX LESSOR 2011 2012 20131 TEXTAINER 2,470 2,775 3,040 2 TRITON 1,855 2,060 2,200 3 TAL 1,625 1,935 2,050 4 FLORENS 1,775 1,855 1,900 5 SEA CUBE 930 1,225 1,300 6 SEACO 990 1,095 1,190 7 CAI 930 1,060 1,150 8 CRONOS 725 810 880 9 DONG FANG 495 485 555
10 TOUX 505 520 500 OTHERS 1,650 1,830 1,985 Lessor Total 13,950 15,650 16,750
Container Leasing
Aspirations of Lessor & LesseeLe
ssor • Invests finance & capital to build
High Quality Container Assets
• Anticipate demand & ensure supply - continuous investment
• Continuous investments in maintenance & repairs
• Maintain younger fleet
• Exercises stringent due diligence prior credit approval & lease of containers to Lessees
• ‘Time is of essence’ not only for payments but for repair approvals, pick ups, redeliveries etc..
Less
ee
• Expects quality containers for safe carriage & storage
• Prompt supply & redelivery
• Optimum per diem & costs
• Promptness in responses
• Excellent Service Quality
Container Leasing
India - International Lease
Leases for Exim business or International boxes are for exclusive use in international waters
The lease rentals are payable in US Dollars
Shipping Lines, Logistic Companies & NVOCCs are active
Container Leasing
Container Leasing
Container Leasing
Container Leasing
Container Leasing
Customs Act:
Containers used for domestic transportation must be Customs Duty paid
“Bonded”, “in-transit” containers for use in the Domestic Tariff Area is prohibited by Law
Such usage could entail penal actions & payment of duties if discovered and is avoidable
India - Domestic Lease or Domesticated Boxes
IICL• The Institute of
International Container Lessors
COA• Container Owners
Association
IMO• International
Maritime Organization
ISO• International
Organization for Standardization
WCO• World Customs
Organization
BIC• Bureau International
des Containers et du Transport Intermodal
CSC• Convention on
Safety of Containers
International Safety & Standards to be enforced fullyContainer Leasing
Container Leasing
Implementation of International Conventions – CSC, & amendments thereto ( ACEP)
Ensuring only plated containers are used in intermodal supply chains to preserve safety of life & property
Ensuring Over The Road (OTR) restrictions & axle-limits are enforced
Enforcing Central Motor Vehicles Rule (CMVR) overall dimension limits on roadways
International Safety & Standards to be enforced fully
Container LeasingInternational Safety & Standards to be enforced fully
Challenge - Grey market ? Container Leasing
Be Warned…
Multiple Usages
Container Leasing..Dry Vans Flat Racks
Open Top Reefers
Container LeasingSpecials: Open Tops & Flat Racks
Over Dimensional Cargoes like Engineering Goods, Project Cargoes, Machinery, Glass Sheets etc. are carried in Specials
Defence Sector, Logistics players & Manufacturers can operate DOMESTICATED Special Containers for storage & transport…
Container LeasingReefers: Food Supply Chain
Tanks: for Liquids
Liquid Cargoes like Chemicals, Oil, Alcohol, Wine, Gas etc.. can be carried in Tank Containers
Chemical Manufacturers, Liquid Cargo Operators, Logistics Carriers
DOMESTICATED Tank Containers available for storage & transport while scarce capital can be used for other operational requirements
Container Leasing
Container LeasingProject accommodation offsite (factories, highways, SEZs)
Container LeasingAccommodation/storage in CRZ, Hill areas & Ports/Airports
Container LeasingAccommodation/storage in CRZ, Hill areas & Ports/Airports
Container LeasingStorage & distribution of food-grains
Container LeasingAccommodation units
Container LeasingAccommodation units
Container LeasingFood Stalls
Container LeasingFood Stalls
Container LeasingFood Stalls
Container LeasingReefer Storage
Container LeasingSmall Data Centers
Container LeasingMoving Barges
Container LeasingCounters
Container LeasingLunch Room
Container LeasingRemote hospitals
Container LeasingBus Stops
Container LeasingMobile Washrooms – Swach Bharat
SCOPE & Potential for Domestic MovementsCoastal & Inland Waterways • New routes
Rail• Existing plus DMRC,
Double Stack Trains
Road• New expressways &
highways
Static Storage • Raw Materials, Finished
Products
CFS• Transfer from Liner boxes
into Domestic
Food Supply• Storage & Transport
including cold & perishables in Reefer
Defence Sector• Carriage, Transport, Site
Offices, Camps, Rapid Transport, Strategic Storage
Portable office• Portable Training Centre
Rooms/Shelters • Lunch Room / Electrical
Room / Rest Room
Small Data Centre• ATMs & Banks in remote
areas
Storage Rooms• Warehousing
Container Leasing
… And many more
Opportunities!
Container Leasing - Catalyst to Growth
Containers can be used for a variety of purposes not just storage and transport
Example: Grain harvested directly into containers could be stored up to ‘5’ years, if the original moisture content is 12% or less. The containers prevent entry of moisture and insects and therefore the grain leaves the container in the same condition in which it was originally. *
Container Leasing stimulates growth and adds value
Shift of 5% cargo movement from road to coastal will save 1,300 crore rupees in fuel subsidy
The scope is as vast as one can imagine and implement!
In a Nutshell
Source: www.ams.usda.gov
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