GRAFTON, N.D. — COVID-19 is not only affecting merchandise, it’s making an impact on what the cargo is being shipped in.
The deadly coronavirus, also known as COVID-19, is spreading uncertainty across the globe, and not the least in the storage container industry, according to Mike DeSautel, owner of Storage Pros with offices in Moorhead, Thief River Falls, Minn., and Grafton, N.D.
“The biggest thing right now is the uncertainty,” DeSautel said.
At the moment, he said he can’t get confirmation from his suppliers in China as to whether one of the manufacturing factories of new shipping containers is even open.
“I haven’t found anybody who can tell me that,” he said.
DeSautel said he also has suppliers in Germany, Canada and the U.S., but he estimated 95% of new units in the world are manufactured in China and bought directly from the manufacturer.
And, right now, that’s tough, if not downright impossible.
Storage Pros buys, sells and rents steel storage containers, typically 20-foot or 40-foot long, used to house almost any number of goods for interstate and global shipping. While some are new, many are resold units.
“These are the ones that are on the ships,” he said.
DeSautel estimated 99% of all the shipping containers in the world are owned by shipping companies, with different colors signifying the shipping lines they come from. The companies lease the containers for seven years, finance them for 10, and then sell them off.
“And then guys like me buy them and resell them,” DeSautel said. “That’s the used market.”
Storage Pros carries anywhere from 200 to 250 resale units, with another approximate 100 units for rent. Some of the storage units he sells go global, while the rental units cover a five-state radius.
“They come from China, Vietnam, any Asian country where a lot of our products are made,” he said.
The virtual halt caused by the virus has caused DeSautel to rethink his pricing metric.
“Everybody smelled a little blood in the water,” he said, “and container pricing, new and used now, is going up.”
DeSautel estimated the current costs, as opposed to the last two weeks, have been jacked up $100 to $300 per unit.
He’s had to adjust his rates accordingly, although his regional rental rates won’t change at all.
But, he’s also worried about his inventory, especially at a time when a strong economy is sending more business his way than the same time last year. He might be waiting six to eight months for inventory he’s ordered in the last month.
“That’s not good,” he said.
Suppliers have told him they don’t know what to expect, with shipping lines backed-up and no end in sight.
“It’s just a fiasco,” DeSautel said.
WHO: Storage Pros
PHONE: (701) 360-1411