About Abbie Moore

Abbie is a Finance/Investment blogger sharing market experience and investing advice at American Financial Services Associates in New York City, New York.

Investment-Seekers Should Consider Cargo Container Investments

container ship with cargo containersIf you are in search of a good investment which carries very little risk, consider investing in containers. These are the large metal containers that are commonly seen on trains, cargo ships, and trucks. Over the last two decades, shipping container investments have proven that they can help curb the common investment risks associated with investing in stocks and bonds, by operating outside the constant fluctuation of the stock and bond markets.

Shipping containers are widely regarded as an investment in a hard asset. Hard assets are tangible items, unlike company shares and government/corporate bonds. Perhaps the most appealing thing to investors is the fact that container investments are not directly tied to the stock markets, and thus are not subject to volatile price fluctuations. This provides investors with a great way to beat rising inflation as well.

In addition to the great investing benefits listed above, there are three additional reasons investment-seekers should consider investing in shipping containers:

  1. They provide long term returns, have a low dollar entry level and have a strong resale value. They contain a certain amount of nickel and therefore will increase in value over time. Resale values of 30% or more are typical.
  2. Investing in shipping containers provides long-term returns. Shipping containers last 20 years or more. With this long term stability, your investment can remain profitable for decades.
  3. Investing in stocks and bonds can be short term as companies lose value and go out of business. Not so with shipping containers. Your investment is stable and in for the long run.

If you do not have a lot of money to start investing, shipping container investments are ideal. Investors can begin with just one container, at a cost of about $4100 USD. This small investment provides a great beginning and steady returns, without having to invest a lot of money.

Container Shipping Industry Must Invest to Match Global Growth

cma cgm marco polo container shipFrom its modest beginnings in 1956, the container shipping industry has undergone extraordinary growth, to the extent that nowadays it represents a majority of all the seaborne trade. Container shipping, or box shipping, refers to the entire system of containers, ships, trains, and trucks that transports cargo from one location to another. That freight, consisting of everything from electronics to fruit, gets transported around the world in large shipping vessels to port cities; where the containers are received and then rerouted over-land to their final destination. As the industry continues to grow, you can expect that the relationship between vessels owners and port cities will continue to evolve.

Aside from rising container volumes around the world, the size of the ships used in container shipping is growing ever year, as well. Today’s mega-ships, like the Marco Polo and Mary Maersk, cost hundreds of millions of dollars to build, and are able to transport 13,000+ 20-foot shipping containers (or, 20-foot equivalent units, TEUs). The increase in the size of shipping vessels is a sign of the growth and rapid spread of the container shipping industry, worldwide.

Albeit today’s container industry leader is clearly Maersk Line, at the moment container shipping is an industry without monopoly. Once dominated by shipping lines from the United States, new influencers from Europe and Asia are constantly emerging to contribute and re-shape the industry. Many of today’s shipping companies are subsidiaries of private conglomerates, such as Japan’s Nippon Yusen Kaisha (NYK), while others are state-owned enterprises. The United States lost its lead in the industry when a legislative change required the U.S. to employ American crews and build its ships in America. This move put the United States’ shipping industry at a costly disadvantage.

Regardless of the country of origin or the ownership structure of the company, all players in the container shipping industry have the same challenge: to remain price competitive in a volatile industry. When it comes to addressing this concern, it is important to note that many of the shipping industry’s costs are not assumed by the shipping companies themselves, but by the shipping ports. To remain competitive, it is the ports that must invest in maintaining facilities that will support the ultra-large container ships, that are currently in use. To accomplish this, ports have to make major port and infrastructure investments to dredge their channels, and increase terminal space. The fact of the matter is that unless a port has the conditions the shipping line demands, the shipping vessels will not visit and the port’s region will suffer economically.

As consumer demand grows, it is apparent that the container industry will be relied upon to expand with the shipping sector and continue to deliver container cargo to prospering trade destinations, around the world. In doing so, shipping container lines, shipping ports, and investors will profit from investments in international trade and the development of a stronger global economy.