Re-purposed modular shipping containers has become a multi-billion dollar industry (Source) but the overhead costs for inventory expansion can hinder immediate growth for small and medium size container businesses when capital is tied up in daily operations. While purchasing new inventory to supplement your current offerings can re-align utilization percentages, expanding your product line offerings is another healthy approach to meeting demand.
Research to Prevent Excess Supply
While high utilization numbers reflect a healthy income of rental revenue stream rental rates may not necessarily indicate future demand for your containers in the market. Positioning your business for smart controlled growth can increase your revenue without overburdening your equipment, containers, or employees. We believe diversifying your inventory and understanding your local market will play an integral role in making informed purchasing decisions without invasive changes to operations or large overhead.
If RMI was a container rental/leasing company our approach to local growth would begin with the following products that have:
- Low Acquisition Costs
- Immediate Local Demand
- Minimal Competition
The Connecticut Department of Transportation (CDOT) distributed approximately $1.6 billion in 2019 for highway and bridge repair with another four-years and $10 billion left in the five-year Capital Plan. During the first year of funding CDOT distributed approximately $512 million in bidding contracts (Source) to construction companies classified as Small to Medium Entities (SMEs) (Source). With some contracts including multiple companies totaling in the hundreds of million dollars around the state, project managers and local contractors will be working closely with each other’s companies to efficiently manage each project timeline and resource allocation. A temporary on-site office at any of the 62 construction sites across Connecticut benefits customers by:
- Centralizing, Storing, and Reviewing Documents
- Offering Meeting Areas
- Providing Sanitary Facilities
Key Takeaway: Connecticut is undergoing heavy construction but relying on local vendors decreases the typical demand for on-site storage solutions. Capitalizing on the influx of temporary local construction that doesn’t meet traditional demand for storage and identifying the unfilled niche of field offices is a safe and low-cost entry point.
While larger projects centralized to one location and contractor may require multiple 8 x 20 containers for storing heavy traffic signs, generators, lights, and tools (i.e. hand tamper, jackhammer, loader buckets etc.) many of the bids in the CT five year plan consisted of 2-5+ different contractors per jobsite sharing responsibility of meeting project deadlines. Separate storage compartments on a single container for construction contractors would:
- Consolidate Space
- Reduce Storage Costs
- Improve Efficiency
Key Takeaway: Initially, the idea of adding 5+ containers to inventory would feed the demand for on-site storage necessary in a large construction projects but a closer look reveals that the majority of contractors for the CDOT are headquartered in CT (Within 100 Miles) and would have the flexibility to transport equipment on a ‘as-needed’ basis without the costly expenditure of storing everything on-site, long-haul transportation or renting equipment.
Tapping into your local community and understanding the contributing factors that signify worthwhile opportunities allow your company to stay ahead of your competition and act on cyclical, seasonal and geographic opportunities. As your industry continues to grow we encourage you to think critically about your position in the market and areas to diversify your inventory to align with demand.