By Hari Menon
When a shipper owns a freight container, it is called a Shipper-Owned Container shortened to SOC. The shipper who owns the container may be an organization or an individual.
A Brief History of the Modern Container
Let us take a quick look at the origin of the modern freight container and some of its main
The first freight container made of corrugated steel was introduced by the American
entrepreneur Malcolm Maclean in 1955. The initial containers of varying sizes were regularized gradually and the first Japanese container vessel Hakone Maru set sail from Japan to the west coast of the United States with a load of about seven hundred 20’ containers in 1968.
Today we have containers of different types and sizes catering to the different needs of the
industry. There are General Purpose containers (GP), refrigerated containers, open-top
containers, and flatbeds to transport the different types of cargo.
These are available in standard sizes of 20 feet (twenty feet equivalent units or TEU) and 40 feet (forty feet equivalent units or FEU) while containers measuring 45 feet, high-cube
containers, customized freight containers, etc. are also available.
Largest Seas and Oceans in the World Containers are made of Corten steel that is a heavy-duty, corrosion and weather-resistant metal.
A container may be owned by a carrier, a container-leasing company, or an individual.
The main reason why shipper-owned containers (SOC) came about is the demurrage and detention charges. Demurrage is charged for delay in clearance of a container from the port beyond a certain number of days while detention charges are levied on delay in the return of empty containers after destuffing the cargo, beyond a specified number of days.
A SOC comes in handy to an organization that may want to export cargo but its preferred
shipping line is facing a shortage of containers.
When an organization has to store the goods transported in the container for long durations and storage facilities are not available nearby, the SOC doubles up as storage space as well!
How is the SOC Helpful?
Imagine that you work for a company involved in geological surveys based in Toulouse, France. You are going on a survey expedition with a small team to a very remote location in Peru. The heavy-duty survey gear, rations, and camping equipment have to be transported in a 20’ container.
From the nearest port of Callao, it takes about 7 days to clear the cargo and about 25 days to reach the survey location overland. To set up the camp and the survey equipment takes another 3-4 days.
If the container is returned immediately after that and it takes the same number of days for the return trip, it will be 61 days when the empty container is handed back to the container yard.
The combined demurrage and detention-free period are 7 days. If the combined demurrage and detention charge (also known as Merged D&D charges) is $198.00 per day, this works out to $10,692.00 for 54 days.
Upon completion of the survey, a container will have to be arranged to carry the cargo back to port and it will take about the same number of days to put the container on board a ship, if not more.
With no storage facilities available in this remote location, when a SOC is used, the
container can be used as a secure store by the team and it is also available when it is time
to go back after the survey.
The waiting period for the empty container to arrive, the time it takes for packing and
loading the cargo, and most importantly the Merged D&D charges, are all avoided. Besides, the SOC can be used for other such expeditions.