The woes of the container leasing industry
by Dong-Hua Wang
International Journal of Shipping and Transport Logistics (IJSTL), Vol. 6, No. 1, 2014

Abstract: Keeping leased and owned containers in proper balance is vital to the success of ocean carriers. Despite the long-running debate about the advantages of renting versus ownership, the leasing industry had retained control of a relatively stable share of global container fleet before 2004. However, lessors' initial cash investment return (ICIR) generated from new-build dry freight leases has been falling inexorably over the period of study (1992-2008). By assuming perfect substitution between owned and leased containers in container shipment, this paper finds that the Leontief cost functions is a good model in explaining leasing industry's long-run decline in ICIR.

Online publication date: Sat, 24-May-2014

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