Advantages and disadvantages of buying a new or pre-owned container

Nattanan Srisut via 123RF

The first question that may come to mind is whether a shipping container that is maintained in a good condition would become unusable at some stage. According to SARS, the useful lifespan of a container is determined to be 20 years and depreciates in value per year accordingly. However, depending on its location, with a proper and continuous maintenance programme, a container can easily reach up to a lifespan of 30 years.

Once the maximum time period of a container’s expected lifespan has expired, it can then become a safety risk. In practice, containers that have been in use for 15 years or longer are usually sold off for other purposes, as these units are no longer considered to be in a suitable condition for shipping, but still a viable option however to get repurposed for domestic use of some kind.

But even prior to "retirement" of a container, would one then not be in a better position to enjoy the savings that accompany the purchasing of a pre-owned unit that decreased in value year-on-year, such as what is the case with SARS? This might be true in some ways but one should use the same approach and thought process as what you would apply when buying a used car or a new one; naturally any new asset provides far more peace of mind that you aren’t spending money on a product that you might only discover later on is inferior or has something wrong with it.

The savings or difference in price one can expect is also not as a straightforward process as one might expect.

Steel price and rate of exchange

Currently, a new container, for example, will cost you around R32,000 each. Even if a container is not purchased with the intention of using it for shipping, but instead for other uses - for example being renovated into a home or office after some refurbishment, the money spent on repairing and preparing the container, will be so significant that the difference in price between a new and pre-owned container is vastly minimal in comparison to all the other expenses that would be incurred. Purchasing a new one, even if just for peace of mind, makes far more sense.

In addition to the guarantees that accompany a new shipping container, there is also far less paperwork and similar hassles involved when purchasing a new unit, and naturally, used shipping containers are not always available in stock in order to sell.

The transfer of ownership of a pre-owned container can often be time-consuming with extensively more paperwork involved than just merely drawing up a contract or stating the transfer of the asset to the new owner on an official company letterhead as some might expect. Amongst other things, proof of ownership by the company selling the container may be required as a condition of sale, together with additional officially required documentation that needs to be obtained from outside sources.

This becomes more complex if the unit is sold to someone operating in another country, due to the fact that their laws might be different to those of South Africa’s in terms of what is considered a valid contract. Certain countries might also require that official appraisals of the intended container to be purchased, is done by a reputable organisation.

However, the risks involved generally doesn’t justify the minimal difference in price between purchasing a new container instead of a pre-owned one. Don’t be fooled by the fantasy of recycling or saving money on repurposing a container. It’s most often not at all what you had in mind and can very well end up being your worst nightmare instead of a positive investment.