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Where to Buy a Shipping Container

When buying products where you aren’t familiar with the supply chain, it is easy to wind up unhappy with the result.  Shipping containers were invented in the 1950s to transport cargo internationally in the most efficient way possible.  Recently, with the explosion of the secondary market, lots of people are buying and selling containers for other uses.  So where is the best place to buy them?

Let’s start with how containers get to the US to begin with.  Manufacturers, primarily in China, build containers thousands at a time.  Obviously this is the least expensive place to buy them.  Unless you’re buying multiple thousands at a time, you’re not going to be a big enough customer to be able to.  Additionally, if you try to buy them from a manufacturer, you’re going to have to pay freight to get them to the US, handling fees at the port, and then trucking to get them to your location.

There are several large companies in the US that are set up to buy new containers from the manufacturers and surplus used containers from a shipping line, and resell them.  These companies are called wholesalers. To get around the shipping fee, these wholesalers have large overseas organizations that have relationships with shipping lines.  They also may find people with freight to ship and match their destinations up with people who want containers.  A wholesaler can often have containers delivered to any major city in the US with no shipping cost at all.  They also maintain facilities, often near the ports, where they have stock available for sale.  These facilities are called “depots”.  A depot will have a large inventory of every container imaginable, new and used.

Anyone can buy a container from any depot, from anywhere in the country, on a sliding price scale depending on quantity.  Plenty of people have resale businesses set up to access lower prices and broker individual or small quantity container purchases using inventory from a depot.  Not surprisingly, these businesses are called “brokers.”  They rarely have the opportunity to lay eyes on a container before it is sent to the end customer.  However, as they buy high quantities and have little to no overhead, their prices are usually attractive.

So where should you go to buy your container?  It depends on where you are, how many containers you want to buy, and what’s important to you.

For businesses that use lots of containers, you’re going to want to develop a relationship with a wholesaler.  They will be able to order the exact containers you want and can often work with the overseas team to have them delivered to your yard with little to no freight costs.  This is also where you’ll get the best bulk price.

Individuals or businesses looking for a single or small number of containers are going to be best served either going to your nearest depot or working with a broker.  The farther away you buy, the higher your cost to get the container from the depot to your location. The brokers have access to the wholesale pricing at the depots and also have relationships with reputable shipping companies in the US.  The only downside is you’re basically stuck with whatever container arrives unless you want to pay to ship it back. No matter where you buy, be sure to ask if you need a forklift to get the container off the truck at your end.  If you don’t have one, you’ll either need to rent a crane or buy from a depot within 100 miles of your delivery location so the container can be delivered on a tilt bed.

if you need help finding a reputable wholesaler, depot, or broker in your area, we are happy to recommend one.

New vs Used Containers

When buying a shipping container, you will hear different terminology to describe its condition.  Most of the time, these terms have nothing to do with appearance.  Shipping containers were designed and built to carry cargo across the ocean.  The primary users aren’t concerned with what it would look like turned into a hotel.  The secondary market of recycling containers for storage and buildings hasn’t developed a uniform language yet.

New Containers

There are two basic categories of container: new and used.  Even the term “new” is misleading.  As the vast majority of containers are manufactured overseas, they will have all made at least one trip across the ocean to get to the US.  Most of the time, this shipping cost was paid by someone who needed to move cargo, and the container was not sent over empty.  Thus, new containers are commonly referred to as “one trip”.

One trip containers are not perfect but they are as close as you’re going to get.  They don’t bubble wrap containers on ocean liners.  They may have scratches, small dings, and scuffs in the floors.

Used Containers

All containers available in the US other than a one trip are used.  This means they have been carrying cargo all over the world on the ocean.  The shipping lines use them as long as they have cargo to move.  When they have a surplus available somewhere, they sell them to wholesalers for use in the secondary market.  Their condition is labeled strictly by ability to carry cargo, not appearance or age.  A 30 year old, dented and rusted container is just as good as a one trip as long as it is safe to ship cargo.

Official Terms

In the shipping world, the terms for describing the condition are:

CW – Cargo Worthy – The container meets the ISO spec for carrying cargo, in a stack, on the ocean, has been inspected by a licensed and trained inspector, and is certified to be safe.

WWT – Wind and Water Tight – The container is not certified to be safe to transport cargo on a ship.  It has had a visual inspection by a trained inspector and does not have any holes where water or light can come through.

As-Is – There are no representations that the container is safe or water tight.

Occasionally containers sustain significant damage when being used to transport cargo. When the container arrives in a port, it can be repaired and re-certified to CW. The depot estimates how much it will cost to repair the container so it can be re-certified. There are different “grades” which categorize the container by cost to repair to CW.  For example, a Grade A container may only need $50-$100 to repair.  This still doesn’t have anything to do with container age or appearance.  The repairs usually are for things like structural integrity, water tightness, or perhaps damaged latch gear.

Unofficial Terms

Again, none of these terms describe the number of dents, amount of rust, interior smell, or general appearance of the container.  On the secondary market, some resellers have created their own terms to classify a container by appearance.  You might hear someone say “Grade A, B, or C” or “Type I, II, or III” to describe appearance.  These are not official terms and vary depending on where you shop for your container.  They may not even be graded by the same individual using the same criteria within a company.  Be sure to ask for clarification if you are buying a used container with a label other than CW or WWT.

Shipping Container Pricing

A common question we get is, “what does a shipping container cost?” Unfortunately that’s not a simple answer.  It depends where you are, how many you want, what quality you need, and when.

Market Factors

In general, shipping container base pricing fluctuates with the price of steel, the price of gasoline, and the international balance of trade.

Obviously containers are made of thousands of pounds of steel.  The more expensive the steel to produce them costs, the more expensive the end product.  Additionally, as steel goes up in value, the more an old container is worth as scrap.  The shipping lines won’t sell wholesalers a used container for less than they can get at for scrap a recycling facility.

Since containers are primarily used to transport cargo, the cost of moving them around depends on the price of fuel.  This applies not only to the ships carrying them internationally but also to the truck that delivers it to you.

If there is significantly more cargo coming into the US than leaving, there may be a surplus of containers the shipping lines need to get rid of. This pushes prices down.  An example of this might be retail stores importing extra inventory for holiday shopping season.  This happens in the summer.

Location, Location, Location

Some cities in the US import more goods than others.  For example, Columbus has a lot of retail stores’ distribution centers.  Goods are shipped there and distributed by truck and rail all over the country.  Another example is Long Beach, which is a major port for the shipping lines.  These cities will have more containers where someone already paid the freight to have their goods shipped there.  These containers are less expensive than if you have to pay a truck to pick it up at one of these cities and have it brought to you.

Quantity

As containers are considered a commodity, the more you buy the better price you’re going to get.  If you buy a lot or buy often, you can set up a relationship with a wholesaler.

Quantity matters even on delivery of the container to your location.  Most trucks are set up to carry 40′ of shipping container.  This means if you buy two 20′ shipping containers you will pay the same price on delivery as if you only buy one 20′.

Quality

Most of the time, a new shipping container is more expensive than a used one.  You can also select the quality of used you need balanced against the price you want to pay.  Ask your supplier what grading system they use for appearance and ask for examples of what those containers look like.

Type

Finally, know what type of container you need and what you are willing to use to get the price you want.  For example, some people want doors on both ends of the container.  These are known as “double doors”.  The shipping lines have to pay a fee to lock up each door before a container goes on the ship.  Obviously, they are not going to unnecessarily pay extra fees.  So this type is not used in the shipping industry and will not wind up in a used container surplus stack in Cleveland.  The wholesalers realize there is a demand for this type in the secondary US market.  So they buy new ones in China and work with the lines to import them.  Therefore, double doors are available in the US, but only in one trip quality, making them twice the price of a used single door.

Have additional questions?  Contact us at info@conextalk.com.

Engineering Modified Containers

As the modified container market is relatively young, it’s hard to find much information available on best practices and conventions.  The internet is a fountain of misinformation on this topic.  Here are some tips to get started.

Container 101

First of all, we have trained plenty of engineers and architects on designing with containers and have presentations available.  Email us and we are happy to send one to you.  These have all the parts of the container labeled with their correct names and illustrate how they are connected in shipping.

Obtaining a Drawing

The biggest problem engineers have is that containers are all constructed a little bit different based on the manufacturer and their customer.  The ISO spec dictates performance but does not specify how it is achieved.  For example, some people build containers with tube steel for the top rail.  Others use flat bar.   Another problem is the corrugation patterns are different.  If you design something to be attached to a hump 6” from the post and the clients buy a container where 6” is a valley, obviously that won’t work.  We can recommend a top level wholesalers of new containers.  They can send you the engineered drawings used for production.  The caveat is that if your clients end up buying them somewhere else or trying to save a few bucks buying used, all your drawings will be wrong and won’t work.

Building Codes & Toxicology

Over the past couple years the boards of the two industry associations, the MBI and the NPSA, have worked together on having shipping containers added to the IBC.  For this effort, they had an independent third party prepare toxicology testing reports.  They also had the foremost container engineer publish known quantities for loads and other factors.  The summaries of these and other findings can be found here:

https://www.npsa.org/Modified-Containers

Fire Rating Certificate

A few years ago there was also a study done on the fire rating of a container.  We can email you copies of this report.

New vs Used for Building

You’ll hear varying opinions on this, but we always recommend using one trip containers, and high cubes for dwellings.  Additionally, after finishing out a ceiling, the extra height in a high cube will usually be needed for code.

Used containers have been traveling the ocean full of cargo for years.  There’s almost no record to keep track of what was shipped inside them.  Anyone who has this information will consider it proprietary.  Aesthetically, they are rusted and dented and even after they are painted they don’t look great.

Additionally, the dents affect the structural integrity of the system in unquantifiable ways.  A used 40’ high cube is about $2000.  A new one is about $4000.  The customer will spend more on labor trying to get a used container to do what the drawings say than if they had just bought new.  We’ve seen welders cut into them and the container goes “boing!” and twists into an unusable mess.

Value Engineering Tips

If clients are concerned about cost, the most cost effective way to design a structure is to configure the containers in the way they were designed to be used, which is with all the load transferred on the corner castings.  Cantilevered and perpendicular designs all have to be reinforced with structural steel.

Roof penetrations such as skylights also cause problems, making them more expensive.  The roof of a container isn’t flat.  It’s slightly convex to aid in water runoff on the ocean.  Modifications can be done but it is not easy and will likely have to be maintained by the client with caulk.

Be sure your clients know that building container structures is not cheap.  It’s equal to or more expensive than traditional custom building.  The way we explain it is that all the materials that go into it are exactly the same as those in a traditional building.  The only difference is the frame is steel instead of wood.  Which is more expensive, steel or wood?  You save some money by using factory labor instead of onsite labor.  The reason to do a container building instead of traditional construction is that it is much much faster and you wind up with a sturdier product at the end.  They should plan on $175/Sf at a minimum, not including land, delivery or setup and that number can go as high as $350/Sf if they want cladding and containers hanging off each other.

Who Can Build It

If your clients don’t have a contractor or factory in mind yet, we are happy to recommend a few reputable ones across the country.  As the industry is so new, there are a lot of people who think working with containers is easy and start companies.  They quickly find out they were underestimating how hard it is.  I’ve heard from too many clients with shoddy work.

More questions?  Contact us