The trade industry is a well-integrated network of shipping parties, including the container owner and shipping line. It deals with the international transportation of cargo through the containerisation of goods. The difference between container owners and shipping lines lies in their roles and responsibilities. The container owner is concerned with procuring and owning a fleet of different types of containers. The container owner has the authority to sell, buy and lease shipping containers to clients. In contrast, the shipping line owns and operates cargo ships in the maritime facilities. Let us delve deeper into the topic to know more about the difference between container owners and shipping lines.
Lifecycle of shipping containers
Shipping containers are large conex boxes designed to fit different types of cargo and ship them for intermodal transportation. Freight containers are manufactured from corten steel, making them environmentally sustainable, sturdy, and durable. Containers are manufactured in various types and dimensions in the container industry to fulfil multiple shipping needs. On average, the lifespan of a container is approximately 25 years if it is maintained and repaired at regular intervals. During their lifespan, containers can be bought, sold or rented based on your clients’ needs.
Containers are manufactured by assembling various parts following ISO standards. After manufacturing, these containers are bought by container rental companies, shipping lines, shipping companies or individual traders. These containers can further be sold or leased to other businesses that require a container or container fleet. Cargo containers such as the 53 ft intermodal containers are used for international transportation, storage and other commercial uses such as turning them into gyms, offices, cabins, etc. The ownership of shipping containers may vary throughout the container’s lifecycle as the container gets leased, sold, and resold. The supply chain management collaborates with the container industry to distribute containers to ports for maritime shipping.
Who is the owner of shipping containers?
Traders and business organisations own containers or fleets by buying or leasing shipping containers for global trade. There is a pool of shipping container suppliers available throughout the globe to ship containers to clients worldwide. Shipping container companies and traders are the first owners of the cargo containers. They later have the right to continue container trading by selling or leasing the container to their clients. When clients rent shipping containers, the ownership of containers varies between the lessor and lessee based on the container leasing agreement. The ownership goes directly to the buyer when the container is bought. Using container buyback, the secondary owner can also sell the container to another client or sell it back to the shipping company that initially sold it. After exhausting the use of the container, many shipping companies offer container buyback, where they buy the containers they once sold. The owner of the shipping container is responsible for the maintenance and repairs of the container.
What services does a container owner offer?
- Selling– Container owners are primary buyers of ISO standard shipping containers directly from the manufacturers. Not every owner owns all types of containers but focuses on their customer market to decide which containers are higher in value. A few shipping owner benefits include selling off the shipping containers to traders, shipping lines or other clients to generate a higher value.
- Leasing– Another service container owners offer is container leasing. Owners can generate an even more significant revenue by renting shipping containers since the lease rates vary according to the container market and can rise high at times. These leases are made based on different leasing agreements between the lessor and lessee.
- Buying– Container buyback is another service many container owners offer their clients. People or companies who have already bought containers from the container owner can resell them after having exhausted the use of containers.
What is a shipping line?
A shipping line, popularly known as a shipping company, is a maritime organisation that owns and operates cargo ships to transport goods and passengers from one port to the other. In addition to transporting goods, shipping lines also sell and lease shipping containers for storing and transporting goods internationally. Shipping companies directly buy containers from manufacturers and then serve their clients by offering them container trading services. Shipping companies mostly own standard containers in various dimensions and are responsible for cargo handling.
The shipping lines are responsible for customs inspections, documentation clearances, paying taxes and duties, insurance, and storage fees at container depots for international trade. Freight forwarders are 3PL service providers that align with shipping companies, act as an intermediate between the client and the shipping company, and facilitate international cargo transport.
For instance- As an exporter, if you want to transport goods internationally, you can contact a shipping company that will provide you with containers and carry out the containerisation process. It makes it easier for traders to transport their goods across international waters.
What services do shipping lines offer to shippers?
While shipping lines are mostly concerned with cargo fleet operation, some also own shipping containers. However, there is a difference between container owners and shipping lines. Before that, let us look at the services of shipping lines.
- International shipping– Shipping lines are maritime organisations built to facilitate the international transport of goods, including raw materials and finished products, in different forms, such as solid, liquid or gas. Shipping companies specialise in cargo handling and containerised shipping into all types of containers. They operate on designated routes to facilitate cross-border trade.
- Global trade– Consumers worldwide can connect to carry out import and export trade. Shipping lines make it easier for shipping parties to connect and bridge geographical distances and carry trade throughout the year to supply seasonal goods. It helps in boosting the global economy.
- Containerisation– Many shipping companies specialise in containerised cargo transportation and merchandise shipping. In this case, shipping lines are responsible for cargo consolidation and deconsolidation.
- Freight pricing– The shipping rates in the shipping industry are decided by the shipping lines based on the weight and type of cargo, shipping market, distance and other factors. The shipping rates are decided based on the shipping services offered by the company.
- Shipping documentation– Customs clearances and documentation are the job of shipping companies. They are responsible for documenting the bill of lading, customs declaration, and complying with the CBP standards. Different importing countries need the exporters to comply with different guidelines for loading goods, inspection and customs clearances.
Difference between container owners and shipping lines
|Factors||Container Owner||Shipping Lines|
|Ownership||Owns containers for leasing and selling.||Does not essentially own containers but owns vessels for shipping.|
|Responsibilities||Container maintenance, selling, buying, and leasing to customers.||Organising movement of cargo in containers through ships.|
|Management||Providing containers to shipping lines, traders, &freight forwarders and balancing container demands.||Cargo consolidation, route optimisation, documentation, clearances, and stowage planning.|
|Rate calculation||Depends on the market demand at that time.||Depends on the volume, weight, type of cargo for transportation, and delivery destination.|
- Ownership– While a container owner can be an individual or company, a shipping line includes many stakeholders and employees working together in coordination. A container owner owns shipping containers for the storage and transportation of goods. A shipping line is an ocean carrier that offers transportation facilities to ship goods abroad.
- Responsibilities– Container owners are primarily known for owning shipping containers and are responsible for container maintenance, selling, buying and leasing them to their clients. Shipping lines organise seamless cargo movement by assigning cargo ships to carry freight containers.
- Management– Ownership of shipping containers is crucial to the container industry and supply chain. Container owners establish balance in the supply chain by investing in buying shipping containers from manufacturers and then making them available for shipping lines, traders, and freight forwarders. Shipping lines ensure timely consolidation and deconsolidation of goods, customs clearances, and documentation. In addition, they also look into vessel operations, scheduling, routing and other logistics activities.
- Services– Container owners often lease their containers to shipping lines or other logistics organisations for a short to long duration, depending on the container leasing agreement. The lease can be renewed by the shipping lines if needed. All shipping lines supervise the vessel operations, including stowage plan, route optimisation, etc. Some shipping lines own their shipping containers, while others lease them. This helps the shipping lines that own containers to act as container lessors.
- Calculation of rates– The shipping line decides the shipping rates based on the volume, weight, type of cargo for transportation, delivery destination and level of service offered. The shipping fees charged are the revenue they generate. Container owners profit by leasing their containers to shipping lines and generating revenue.
The difference between container owners and shipping lines helps restrict the importance of each of these shipping parties in their fields.
LOTUS Containers is a global market of shipping container solutions and offers container services such as selling and leasing shipping containers. We provide different types of containers in various dimensions to fit your cargo needs.