What Are Container Maintenance Fees?

Shipping containers are the large metal boxes you see on trains, ships, and trucks around the world. They transport goods across oceans and continents, forming the backbone of international trade. But like any valuable asset, containers require regular maintenance to stay in good condition. This is where container maintenance fees come in.

As a container owner or user, you’ll need to pay maintenance fees regularly. This covers the cost of inspecting, repairing, and refurbishing your containers so they meet safety standards.

With proper maintenance, a shipping container can have a lifespan of over 20 years. Without it, containers deteriorate rapidly in the harsh environments they operate.

Maintenance fees are typically charged annually or on a per-trip basis. They can vary widely depending on factors like:

• Container type – Dry freight containers have lower fees than specialized units like refrigerated or tank containers. Newer containers usually have lower fees too.
• Age of the container – Older containers require more maintenance work, so fees tend to rise as containers get older.
• Maintenance program – Basic inspection and repair programs have lower fees than comprehensive refurbishment services.
• Maintenance provider – Fees can vary significantly between different container leasing firms or depots.

So who exactly pays these container maintenance fees? There are a few parties involved:

Container Leasing Companies

Leasing companies own containers and rent them out to shippers and carriers. As owners, they are responsible for carrying out regular maintenance on their fleet. This gets passed on as part of the leasing fee paid by customers.

Leasing companies may perform routine maintenance at their own depots. More substantial work gets contracted out to independent maintenance and repair depots.

Shipping Lines

Shipping lines lease most of the containers they use from leasing companies. They pay per-trip or annual maintenance fees as stipulated in their lease agreements.

But shipping lines often own a portion of their own container fleet too. They are responsible for maintaining these company-owned containers over their lifespan.

Many larger shipping firms have their own container maintenance depots. Others contract out the work to third-party vendors. Either way, the maintenance costs ultimately get added to the freight rates paid by cargo owners.

Cargo Owners

While not directly involved in the maintenance process, cargo owners pay for container maintenance indirectly. As we mentioned, shipping lines factor these costs into the freight rates they charge shippers.

So when a manufacturer or distributor pays to ship products overseas, a portion of those charges go towards covering container maintenance.

Maintenance & Repair Depots

These independent facilities handle the actual maintenance and repair work on containers. Depots have skilled technicians and equipment like welding machines, sandblasters, and painting booths.

Container owners and leasing firms pay depots for their maintenance services. Some depots are independent while others are owned by leasing companies.

Now that we’ve seen who pays for container maintenance, let’s look at what kind of maintenance work is typically performed.

What Does Container Maintenance Involve?

Containers are put through a lot during their travels. They endure bumpy truck rides, the rolling motion of ships at sea, and the strains of being stacked ten high on ships and in yards. Over years of service, they develop dents, rust, and structural fatigue.

Regular maintenance is vital to catching and fixing any issues before they pose a safety hazard. Here are some of the key maintenance activities:

Inspections

Containers should be visually inspected inside and out multiple times over their lifespan. This includes checking for:

• Dents and cracks – Any damage to the container structure that may affect structural integrity.
• Rust and corrosion – Paint coatings wear off over time, exposing the steel underneath to moisture and rust.
• Leaks – Containers can develop leaks, which is problematic for goods damaged by water. Refrigerated units can leak coolant as well.
• Mechanical defects – Issues with doors, locks, hinges, refrigeration units, etc.
• Cleanliness – Containers must be kept clean to avoid contaminating the next cargo loaded.

Detailed records are kept on any defects found. The owner can then decide if spot repairs are sufficient or if more extensive work is needed.

Spot Repairs

For minor damage like small dents or rust spots, technicians will make targeted repairs:

• Dents – Technicians use hammers and pull bars to pound out dents from the inside, restoring the container’s box structure.
• Rust – Grinders are used to remove paint and rust down to bare metal. The area is then cleaned, primed and repainted to prevent further rusting.
• Leaks – Small leaks can be patched over with sealants. More serious leaks require replacing rivets or entire panels.

Refurbishment

After 5-12 years of service, most containers undergo a full refurbishment. This extensive process involves:

• Blasting – The container’s paint and rust coatings are completely stripped off by sandblasting or chemical stripping. This leaves bare metal.
• Repairs – With the container stripped down, technicians can inspect it thoroughly and make any repairs needed – welding cracked corners, replacing corroded panels, etc.
• New coatings – The container is resprayed with primer, undercoat, and weather-resistant topcoat paint. Some get specialized internal coatings for certain cargoes.
• Replacement parts – Worn outdoor gaskets, fittings, and hardware get replaced. In reefer containers, the machinery may be overhauled.
• Cleaning – The container interior is thoroughly decontaminated and cleaned before being put back into service.

This extensive refurbishment can extend a container’s useful lifespan by many years. It’s cheaper than buying a brand-new container.

Testing & Inspection

Throughout a container’s lifespan, it will undergo thorough structural and operational testing to ensure it meets various safety standards. This includes:

• CAS (Criteria of Acceptability) – A visual inspection checks for any damage or defects per ISO criteria. Done before refurbishment and before ships load containers.
• CSC (Container Safety Convention) – Verifies the structural integrity of the container chassis via a strength test. Required every 30 months.
• ACEP (Approved Continuous Examination Program) – Ongoing program that combines frequent CAS inspections with periodic CSC testing. Gives a complete picture of container’s condition.
• Port and terminal checks – Customs authorities and terminals will inspect containers and reject any that seem unsafe.

Passing these inspections is mandatory for containers in service. It provides quality assurance for all parties using that container.

Why Are Maintenance Fees So Important?

You might wonder why the shipping industry is willing to spend so much to maintain containers. Wouldn’t it be cheaper to just use them until they fall apart and buy new ones?

In fact, there are some compelling reasons why proper maintenance matters:

Maximize Container Lifespans

A one-time investment in a new container costs between $1,500-and $2,000. With regular maintenance, that same container can remain in service for 12 years or longer.

Doing the math, the total cost of buying containers would be astronomical if they weren’t maintained to maximize their usable lifespans.

Reduce Operating Costs

When containers get older and deteriorate, they become less efficient to operate. Issues like refrigerant leaks raise energy bills. Containers in poor shape take longer to load and discharge in ports.

Investing in maintenance avoids these extra costs associated with old, faulty containers.

Ensure Reliability

Shippers don’t want to book containers that frequently break down or leak. Maintaining containers helps provide quality assurance to customers.

Improve Safety

The ocean shipping environment is harsh. Containers need to withstand storms, constant saltwater exposure, and rough handling when loading and unloading.

If the container structure gets compromised, it risks damaging cargo or collapsing altogether. Maintenance keeps them structurally sound.

Avoid Rejections

Authorities thoroughly inspect containers in ports. If they find serious defects or safety issues, those containers get rejected and taken out of service.

Maintenance minimizes how often containers fail these inspections. It keeps the overall fleet utilization high.

Meet Regulatory Standards

Most jurisdictions regulate the maintenance of shipping containers to various degrees. Failing to meet maintenance schedules can result in fines or blacklisting by authorities.

Proper maintenance keeps containers compliant with regulations like CSC, ACEP, and port container standards.

Improve Asset Values

Leasing companies can maximize their rental income if they maintain containers well. Refurbished containers can be rented for close to the same price as newer containers.

Shipping lines also see higher resale value when selling older containers that have been well maintained over their lifespan.

In essence, spending on maintenance provides an excellent return on investment for container users. The savings offset the cost over the long run.

Factors That Determine Maintenance Costs

Now you know why container maintenance is so critical for the industry. But what determines how much maintenance costs overall for a container fleet? There are a few key factors:

Type of Container

Specialized units like reefers and tankers require more frequent maintenance and expensive parts and repairs. A reefer may need its refrigeration unit serviced every 2-3 years. The hazardous materials carried in tank containers wear them down faster too.

Dry vans are the simplest and cheapest containers to maintain.

Age of Containers

Brand-new containers require minimal maintenance aside from routine inspections. But costs rise steadily as containers get older and need more repairs and refurbishment.

Fleets with newer containers will pay less than those operating older boxes.

Maintenance Program

Companies can choose different maintenance strategies:

• Run-to-failure means using containers until they break down or fail inspections. This avoids proactive maintenance costs but results in unpredictable failures and more downtime.
• Fixed-interval chooses a set periodic schedule, like refurbishing reefers every 3 years regardless of condition. This improves predictability but may lead to premature maintenance.
• Condition-based maintenance is done whenever inspections reveal the need for specific repairs. More customized but requires rigorous inspections.

More intensive maintenance programs cost more but deliver greater performance and reliability.

Use Profile

How and where containers operate impacts wear and tear. Containers used for harsh North Atlantic crossings face worse weather than coastal Asian shipping. Hauling heavy mineral cargoes accelerates fatigue.

Companies tailor maintenance to the operating conditions their fleet faces.

Maintenance Provider

Substantial cost differences exist between depots. Factors like labor costs, economies of scale, equipment, and throughput affect pricing.

Firms can realize major savings by choosing the most cost-efficient maintenance vendors. This takes careful benchmarking.

Material and Labor

Costs for parts, paint, steel, etc. fluctuate based on commodity markets. Similarly, labor rates depend on wages, unions, and labor law.

If material and labor costs rise, maintenance fees will likely follow.

By understanding what drives maintenance costs, companies can better budget and manage this major operating expense. They can also take steps to optimize their maintenance strategy.

Best Practices For Minimizing Maintenance Costs

Here are a few key strategies container fleets employ to minimize their maintenance costs:

• Conduct regular inspections to catch issues early before they worsen. Timely minor repairs cost far less than major work later on.
• Invest in high-quality paint systems, gaskets, and parts that provide maximum longevity and corrosion resistance.
• Phase out older containers whose maintenance needs and downtime rise past a certain point. Set target lifespans for each container type.
• Upgrade operating practices to reduce container damage – strapping cargo better, using spreader bars when lifting, etc.
• Choose strategically located maintenance vendors who can offer the best value.
• Leverage data analytics to predict optimal timing and scope of maintenance work.
• Standardize fleets to a few compatible container models. This streamlines sourcing spare parts and optimizing maintenance programs.
• Train staff thoroughly on proper day-to-day container handling and care when loading, lashing, and storing.

With rising costs across the supply chain, it makes sense for any container user to periodically review their maintenance strategy. Even modest improvements in efficiency and pricing can yield considerable savings over hundreds or thousands of containers.

Proper maintenance also provides important reassurance to cargo owners that their goods are traveling safely in sturdy, leak-proof containers. This quality container service helps shipping lines attract more customers in a very competitive industry.

Conclusion

Although they might appear simple on the outside, shipping containers require continual, costly maintenance to operate for years or decades over their long lifespan.

Container maintenance involves regular inspections, repairs, refurbishment, and safety testing. This is performed by leasing companies, shipping lines, and specialized depots.

Cargo owners ultimately pay for these maintenance fees through the freight rates charged by shipping companies. However container owners benefit too through lower operating costs, minimized downtime, improved safety and asset values, and regulatory compliance.

Balancing maintenance costs against these benefits, and finding ways to optimize maintenance programs, is an ongoing focus for firms operating large fleets of containers across the globe.