Container Leasing Arrangements in the Shipping Industry

Characteristics of container leasing arrangements

What is Container Leasing?

Container leasing is renting containers over a short or extended period. Different container supplier companies provide various types of containers to businesses at a mutually decided rate. It is an operating agreement in which both parties agree to the terms and conditions of the leasing arrangement as applicable by the law. Leasing shipping containers provides numerous advantages.

Key Benefits of Container Leasing

If you decide on buying a shipping container, you might face maintenance problems and rigid sizes that may not fit your seasonal needs. Container leasing is, therefore, a great choice to address your issues through customized containers with portable and sturdy structures. Here are five benefits of leasing or renting a container.

  • Ideal for Short Events

Renting cargo containers for a short period can be a logistical idea for meeting your business needs. If you want to transport goods only once, then leasing is an ideal option as it provides easy and safe transport capabilities. Moving your possessions through low-quality boxes can lead to damages and losses. You can avoid such issues by renting containers wherein you can move or transport as many units as you want. 

  • Flexibility 

Container leasing gives flexibility for you to determine the perfect size requirements. You can get a smaller or larger container and make an easy set-up. You can always consider your space requirements so that you can temporarily store items. Moreover, buying freight containers can be troublesome when it does not fit your desired size. 

  • Convenient and Easy to Use

Undoubtedly, renting maritime shipping containers is much more feasible than buying it. Leasing companies can change containers if it does not fit your ideal size. You can use it hassle-free without any requirement of a solid foundation. Unlike purchased freight containers, you don’t have the hassle of keeping containers when you don’t want to use them.

  • Cost

Renting cargo containers is best for you as a business or an individual with a tight budget. This agreement can be an attractive investment for businesses.

  • No maintenance and Disposal Hassle

Shipping containers require daily maintenance to keep them in working condition for extended periods. If not maintained properly, they will start to deteriorate and appear outdated. This problem can be solved with the renting option in which you can change the old container with a newer one. Additionally, damages are levied on the leasing companies during the entire leasing duration, and you don’t need to pay out of your pocket for it.  

Types of Container Leasing Agreements

We will walk you through 4 different kinds of leasing agreements that will help you make the right choice for your business. 

  • Master Lease Agreement

They are also known as a full-service plan. The leasing companies are liable for maintenance and repair. After you collect the container, the contract comes into effect.

The prominent advantage of the master lease agreement is that the leasing company takes full responsibility for managing containers. You can get pick-up and drop-offs to numerous locations and a storage facility at the depot. If you want a container for a specified period, it is a flexible option that goes according to your plan and budget. 

  • Short-term Agreement 

It is the kind of agreement that lies for a brief period and is sometimes called a ‘spot market lease.’ As we all know that market conditions are volatile and uncertain, there is the creation of a short-term agreement in which duration is more than six months. With this agreement, you can plan ahead of time, which holds great significance when there is a sudden surge in demand. 

  • Long-term Agreement 

This agreement is also known as a ‘dry lease,’ meaning a fixed lease period. The duration of the agreement is between 5 to 7 years. Please note that most long-term agreements are changeable and can be modified per market conditions.

Under this agreement, you receive a new container that can be interchanged with other carriers when required. In that case, the leasing company might charge a sum of money. It is more of a customer-defined contract wherein they decide to return the container or are willing to extend the contract. 

  • One-way Agreement

When you lease freight containers from one place to another for regional needs, a one-way lease agreement is appropriate to be made. You and your lessor can optimize operations to move containers from low-demand to high-demand areas. In simple words, the containers are transferred to a location that is easy to repair. 

Container leasing is a renowned concept evolving in the shipping industry, providing faster turnaround and on-time deliveries. Leasing containers for a fixed time can offer flexibility in using them and planning a budget. Different leasing agreements have come into place so that you can make the right move for your container needs. We hope this blog helped you with a detailed account of the container leasing concept and benefits that can assist you when finalizing.

LOTUS Containers, a prime shipping container trader helps you lease cargo containers at cost-effective prices. We offer container-buying and leasing for all shipping container types and dimensions. To avail of maximum benefits, contact us anytime and get the most affordable shipping units.

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