Cubes of Steel

CAI International’s shipping containers keep the global economic engine moving.

Shipping containers are the globe-trotters of commerce, carrying consumer goods, manufacturing components, electronics, apparel, food, and a bevy of other products to ports in places exotic and plain, well-known and obscure. CAI International has made a business out of such containers, leasing and managing them in countries around the world. Though the reach of the business is impressive, president and CEO Victor Garcia says the impact of his company’s containers on global trade will surprise you.

“Shipping containers are one of those things that people see every day on roads, but probably don’t notice. They really are the glue that keeps commerce going.” -Victor Garcia

The majority of CAI’s containers start life in China, where Garcia says the combination of low production costs and easy export access create an efficient manufacturing environment. From there, the containers travel the world. “Our customers usually pick them up in China under a long-term lease,” Garcia explains. “Then they go worldwide—to the US, Europe, Latin America, and Asia.” Throughout their journey, the containers travel by boat, truck, and train, and transit through ports on nearly every continent, often stopping over at manufacturing facilities, retailers, grocers, and other businesses. Once the containers reach their destination and are emptied of their contents, they’re returned to the port to be reloaded, with many making their way back to Asia to once again take on newly manufactured goods.

Concerns from sustainability to security shape today’s international shipping industry. “There’s much more focus on the environment, in terms of the components that go into these containers and how we source those components,” Garcia says.

Striking a balance between meeting the technical requirements of a sturdy and secure container, while being sensitive to the environment, is a primary challenge. Manufacturers and operators have moved to water-based paint, and avoid the use of tropical hardwoods that are in increasingly short supply. Even the container floors have been reengineered in an effort to minimize voids and maximize the amount of cargo each container can carry. “We deal with manufacturers who are focused on the quality standard we need as a company, as well as what the industry and our customers need,” Garcia says.

CAI’s containers offer tremendous flexibility, moving from offshore to onshore all while controlling the product from the manufacturer to the final endpoint. But global trade brings with it concerns about political unrest and even terrorism, issues Garcia says CAI takes into consideration with every transaction. “We must make sure we’re in compliance with all foreign laws, as well as US laws relating to how these containers are used,” he explains.

When one of CAI’s containers reaches its useful life—usually somewhere near the 15- to 20-year mark—there are still many uses it can serve. “Once they aren’t serviceable for our business, there’s a large secondary market for containers,” Garcia says. Often, they become shipper-owned equipment for freight forwarders, and, in many regions around the world, containers are employed as static storage. In some cases, they might even become new digs. “Some are remanufactured for housing, both high-end as well as basic,” Garcia says. From simple to trendy, interest is growing in turning used containers into homes.

Garcia has seen steady growth in the international shipping industry for the past several decades. “Growth has come largely from the movement of more and more cargoes being containerized for efficiency,” he says. The United States and Europe continue to be big sources of container demand, but less-developed countries, particularly those in Asia, are increasingly needing container support. “Growth in Asia is increasing at a double-digit pace,” Garcia says. “That’s as a result of a lot of those economies moving up to a sort of middle-class state.” As more people in these areas begin to require better living standards, Garcia expects to see long-term trends for container needs growing as well.

One thing Garcia says that many people outside the industry often don’t recognize is the key advantage of uniformity offered by today’s shipping containers, which allows for increased globalization to occur. “If it wasn’t for the standardization of that asset, you wouldn’t be able to have all the goods that we take for granted,” he says. Shipping containers may not catch your attention, but their contribution to the economy is unmistakable. “Shipping containers are one of those things that people see every day on roads, but probably don’t notice,” Garcia says. “They really are the glue that keeps commerce going.”