8 BULKDISTRIBUTOR Equipment Leasing
May / June 2021
CS Leasing on course for more global growth
Since it was founded six years ago , CS Leasing has risen swiftly up the ranks to become the fifth largest ISO tank container lessor in the world , according to the 2021 Global Fleet Report from ITCO . The US-headquartered company has been growing fast year-onyear both with regards to fleet size and global footprint and despite the global pandemic , says that 2020 was no exception . After an initial slowdown in the first part of 2020 as the world consolidated , borders locked down and international trade slumped , demand sprang back in Q3 and Q4 and CS Leasing entered 2021 with over 18,000 tanks . As of spring 2021 , the company ’ s tank container fleet stands at just over 20,000 units with a similar number of dry freight specials and a strong pipeline of orders for the remainder of 2021 . Its dry freight specials are used mainly in the Australian mining logistics industry , but CS Leasing notes that “ while we have grown the fleet in Australia , we have also started to expand into other markets ”. However , the pandemic has not been without challenges that linger into 2021 , requiring careful management . “ Tank prices and lead times have gone up , leaving some leasing companies with minimal newbuild inventories ,” says CS Leasing . “ As with all asset types , repositioning costs have increased greatly , putting pressure on inventories in key regions such as Europe and the US Gulf . We
CS Leasing : focused on what it has always been doing – building one of the industry ’ s youngest fleets
continue to work with our customers to provide a pipeline of new equipment coming into both these core locations .” Another impact of the pandemic , of course , was the pivot to working from home . As a young company designed from the ground up in 2015 / 2016 , CS Leasing says that its systems and procedures were already digitalised , and the company ’ s teams around the globe were used to working remotely . “ When the work from home requirements came in , both our back office and marketing teams continued to work effectively to support our customers ,” says the lessor . “ However , we have greatly missed face
The future-proof , supply chain champion to face contact with our customers and vendors and the collaboration and innovation we get when we all meet as a team . We definitely look forward to the world opening up again !” Digitalisation is part and parcel of modern business operations and CS Leasing is no exception . “ We are always looking for ways to improve our systems so we can be more efficient internally and better support all our stakeholders and customers . Our website has evolved over time to provide more support to our customers and all our employees have live fleet information available on any device they chose , allowing for quick decision making and improved customer service ,” says the company . The tank container leasing sector – like so many others – has witnessed increased consolidation in recent years . “ The tank container leasing sector is currently seen as a good investment and we welcome the engagement of great companies such as GATX and ARCUS which illustrates the value of our industry and the critical role we play in global supply chains ,” says CS Leasing . “ It ’ s good that customers have a choice of quality leasing companies to work with , creating healthy competition , which is good for all industry players .” While there have been a lot of changes in the tank leasing sector , “ we are pleased to say that we are still the same ,” says CS Leasing . “ We are not absorbing new fleets and working with new ownership structures but instead remain totally focused on what we have always been doing – building one of the industry ’ s youngest fleets of tanks and dry freight specials , only commissioning high specification equipment – all our tanks , for instance , have 4.6mm shells and top-quality ancillaries – and investing for the long-term growth of our business and partnerships .” Equipment is of course only one dimension . “ While we are growing the fleet , we are also expanding our global network ,” says the company . “ We have hired some new experienced operations resources in the US and are actively looking for more salespeople in Europe and Asia to join our team . We strive to create an innovative culture that provides autonomy where it ’ s needed , with a transparent , flat management team to speed up decisions and ensure we remain reactive to the market and our customers ’ needs . Our fundamental philosophy is to provide a global network with local expert support .” Access to capital is also crucial . Over the past few months , CS Leasing has expanded and strengthened its relationship with the company ’ s bank group , which consists of five banks with deep experience in the container industry . “ This provides us with a solid foundation for further growth , allowing us to continue to support current and new customers and other projects as they present themselves . In every dimension , we are building for the long term ,” concludes the company .
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GATX posts lower income
GATX posted 2021 first quarter net income of US $ 36.5 million or $ 1.02 per share . This compared with $ 47.2 million or $ 1.33 per share in the first quarter of 2020 . “ Conditions in the North American railcar leasing market are consistent with our outlook coming into the year ,” said Brian A Kenney , president and CEO . “ GATX ’ s fleet utilisation decreased slightly to 97.8 percent and our renewal success rate was 77.7 percent for the quarter . While absolute lease rates for many car types modestly increased from the prior quarter , pressure on revenue remains given the continuing high number of idle cars industrywide . The first-quarter renewal lease rate change of GATX ’ s Lease Price Index was negative 18.1 percent , primarily due to energy-related car types .” Kenney added that GATX continues to identify opportunities in the current environment to grow its asset base in North America . “ Our commercial team has successfully placed with customers nearly all cars expected to be delivered in 2021 under our supply agreements as well as over 1,000 additional cars outside of the supply agreements that will deliver by mid-2022 ,” he said . Rail International performed as expected . GATX Rail Europe maintained high fleet utilisation of 98.2 percent at quarter-end and continues to experience small increases in renewal lease rates . Despite a recent resurgence of COVID-19 in Europe and India , demand for railcars remains stable as the firm continues to grow and diversify our fleets in both regions . Rail North America reported segment profit of $ 65.7 million in the first quarter , compared to $ 72 million in the first quarter of 2020 . Lower division profit was primarily a result of lower gains on asset dispositions and lower lease revenue , partially offset by lower maintenance expense . Fleet utilisation was 97.8 percent at the end of the first quarter , compared to 98.1 percent at the end of the prior quarter .
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