January 5, 2025 • 27 mins
Explore the fascinating and ever-expanding applications of shipping containers in modern construction and beyond. From housing to retail micro-fulfillment centers, containers are gaining traction across sectors. Max Birner, CEO at Boxhub, discusses the challenges of a fragmented market and the undeniable benefits—financial, environmental, and speed—of building with shipping containers. In addition, Max shares the findings of his company's latest industry whitepaper and speaks to the mainstream acceptance of container construction as well as BoxHub's ambitious plans for geographic expansion and product diversification.
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Speaker 1 (00:00):
Hello and welcome to Inside Modular, the podcast of
commercial modular constructionbrought to you by the Modular
Building Institute.
Welcome everyone.
My name is John McMullen.
I'm the marketing director hereat MBI.
Today I'm joined by Max Berner,ceo at BoxHub.
Max is here to talk about thestate of the shipping container
market and how his company ishelping to facilitate
(00:22):
container-based construction.
Max welcome.
Speaker 2 (00:26):
John, pleasure to be here.
Speaker 1 (00:28):
Thank you so much.
Tell me about yourself, max,what's your background and what
led you to co-founding Boxhub.
Speaker 2 (00:35):
Yeah, so my background is really tech and
specifically, tech startups.
I founded my first company whenI was 21, back when I was still
living in the UK.
It was a marketing platform atthe time that we later
successfully sold.
After that, I took a few yearsoff, then thought I, you know, I
(00:56):
really want to focus on doingsomething good for the world.
So I, at the time, moved to theMiddle East, to Jordan.
There was a Syrian refugeecrisis going on at the time and
I thought I really want tosupport and help with that
situation, and so I co-foundedanother company there called
Nawa, which helps funneldonations to the right charities
(01:19):
in the region in the region.
And after that, again, I tooksome time off and I was very,
very lucky in 2017 to run into aguy called Philip.
Philip used to work for Maerskand Maersk affiliate companies
for almost 12 years and Philip,through his experience at Maersk
(01:42):
and in the shipping industry,came up with the idea for BoxHub
.
He told me about it at the time.
I loved it from the get-go andI joined him shortly after to
build BoxHub in the UnitedStates.
Speaker 1 (01:55):
Wow, that's quite a background.
So what is BoxHub?
What's its purpose, how does itwork?
Speaker 2 (02:01):
BoxHub really tries to address how traditional
container companies sell theircontainers to end customers, and
so there are huge challengesbecause historically there's not
been any technology used and soit was very, very difficult and
a tedious process for any typeof customer.
And so that could be a consumer, could be a farmer, could be a
(02:24):
retailer, could be aconstruction company to source
and buy containers and get themdelivered.
Before Boxhub, the only way fora consumer or customer to buy a
container was to find the localcontainer yard and drive to the
container yard, negotiate withthem and then hope that the
container gets somehow delivered, which is obviously a very 21st
(02:47):
century experience.
And we thought in the future,most people buy online and
certainly everybody's used toplaces like Amazon and other
online shops, and so we wantedto bring the of like the Amazon
style shopping experience tobusiness and consumer customers
(03:08):
for containers.
So those customers buycontainers for multiple
different use cases.
The majority of them is simplestorage, but another big use
case is, of course, modularhousing and modular construction
.
Another big use case is alsojust to buy them to use them to
move somewhere else later, butin any case, all of them we
(03:30):
wanted to address and we wantedto provide with the perfect
online and offline experience.
That was one part of the idea.
The other piece of BoxUp is thatall the containers, before they
get handed down via offlinewholesalers and local traders
and local container yards andthen to the end customer.
(03:50):
All of them are pretty muchowned by big shipping lines and
there's 40, 50 extremely largeorganizations in the world that
own 40 million shippingcontainers that are used for
trade.
And Philip's experience at MERSshowed that these huge
(04:11):
organizations sell their oldcontainers every year, millions
of containers but they don'treally have a team or are not
really set up to sell those veryefficiently and he saw that
from inside a shipping line.
And so the other piece ofBoxHub is actually making it
easier for shipping lines andfor large container owners to
sell their containers.
(04:31):
So, in summary, one, we want tomake it super easy for anyone
to buy containers and get themdelivered and secondly, we want
to make it super easy for thebig container owners, the
shipping lines and the containerfactories to sell them, and we
are that connection in between.
Speaker 1 (04:46):
I'm curious what drew you as an entrepreneur?
What got you excited about theshipping container industry?
Speaker 2 (04:53):
Yeah, I thought I was immediately amazed by how
little technology had beenimplemented in this industry
over the last five to ten yearscompared to most other
industries the financialindustry, the insurance industry
, uh, e-commerce, shopping,logistics pretty much most
(05:14):
industries had had beendisrupted with technology in the
last years.
The shipping industry andspecifically the shipping was in
a trade had not been at all.
I thought it was a greatopportunity.
I think you know I want tospend my time with something
that creates value.
I want to build companies thatmake people's lives easier or
(05:38):
better in some way, and Ithought this is a huge problem
that hadn't been addressed.
And by using technology andsimple tactics and strategies
that are used by othertechnology companies, by simply
implementing that in theindustry, you can make a lot of
leeway, and I think we've grownsince 2017 spectacularly in the
(06:00):
US, with a leading marketplacenow for shipping containers, and
I think our reviews are by farthe best in the industry, and I
think it's a testament to us notusing technology just because
we want to, but using technologyspecifically in a way that
makes everybody's experiencebetter.
Speaker 1 (06:21):
So how does this industry work exactly from
behind the scenes?
I know you, your partner,philip, saw a lot of this from
his experience.
How does this industry work?
What's the life cycle of acontainer from start to finish?
And I'm really curious how doesa container go from being
shipped from port to port, beingowned by one of these, these
(06:43):
large companies, to being partof a building?
Speaker 2 (06:46):
Most containers, almost all containers, are
produced in China.
There are a few countriesnowadays that have also new
factories, including India or,for example, vietnam, places
usually where also things likeclothing increasingly gets
produced nowadays.
So the factory would producethe container at the request of,
(07:08):
let's say, a shipping line.
The shipping line picks thatcontainer up, brings it to
another factory in, let's say,shanghai, where it is filled up
with goods for Walmart that havebeen produced there.
From there it goes to the portbeing loaded on a big container
ship and then shipped over to,let's say, long Beach.
Long Beach is unloaded, put ona truck and then the truck might
(07:29):
drive inland up to Salt LakeCity or Denver or Texas, where
it goes directly to Walmart andthe goods are unloaded there.
At this point the containerowner so the shipping shipping
line decides to either bring thecontainer back to long beach on
(07:50):
a truck and then ship it backto china, or it decides to store
it at a local container yardand then, historically, that
container would have been soldby the shipping line to to an
offline wholesaler.
The offline wholesaler mightsell the container to another
offline trader or container yard.
(08:10):
It's being brought there by atruck and then at the other yard
, that other company puts amargin on top and the end
customer can buy it there.
That was basically historicallyhow the industry worked.
We think obviously, as Imentioned before, there's a lot
of challenges with that.
Number one.
We do not want the container tobe brought back empty to China
(08:33):
in the first place A hugeenvironmental impact that we
want to reduce and huge costsalso for shipping lines.
$15 to $20 billion a year arespent on sending containers
empty back to places like China.
Year are spent on sendingcontainers empty back to places
like China.
And of course, you knowhistorically, if you have a lot
of local traders, a lot ofoffline wholesalers, it creates
(08:53):
a lot of intransparency andprice.
Everybody puts a marginsomewhere and ultimately also
the experience is not great forcustomers.
So we try to work directly withthe shipping line and we tell
them don't send a containeranywhere.
Try to work directly with theshipping line and we tell them
don't send a container anywhere.
We will take it from youexactly in the place where the
Walmart is, where you unloadedit, and then we create a
(09:19):
transparent market where pricesare easy to see online and we
find customers for you in thatmarket and thereby reducing
repositioning and also cuttingdown the moves, even between
yards.
Speaker 1 (09:27):
BoxHub has just published a white paper that I
was lucky enough to see.
Thank you very much for sendingit and the white paper dives
into the state of the shippingcontainer market and the
changing ways that shippingcontainers are being used.
What can you tell me about howthis report came together and
where did the information comefrom?
Speaker 2 (09:47):
Yeah, so we of course have a huge customer base, lots
of different customers, lots ofdifferent use cases.
So a lot of the information inthat report comes from first
party data, so from our owncustomers.
We run surveys, we look atstatistics, we visit our
customers, talk to them, wevisit our suppliers in the
(10:09):
shipping lines and talk to them.
So there's a lot of data thatcomes from primary sources.
Of course, we also use a lot ofthird-party data, for example
from the Modular BuildingInstitute, and then you know
other research macroeconomicresearch, and then other
research, macroeconomic research.
So it's a combination ofdifferent data points and
(10:32):
ultimately, I just spent thelast month actually visiting
quite a lot of modular containerbuilding companies.
We also talked to them toreally understand trends, what
they're looking for.
Speaker 1 (10:48):
Well, fantastic.
I'm glad you have all that Inyour recent memory.
I would love to ask you aboutthat.
So what is the?
The current state of the, thecontainer is industry.
Have you seen it?
What trends are have you beenseeing over the past few years
and what are you seeing now?
Speaker 2 (11:00):
So container industry generally has changed a lot, I
would say, since 2020 2020.
As we all know, covet started.
They had huge supply chaindisruptions across the entire
world, right, and so we all knowthat containers are being used
(11:20):
primarily for global trade, forpretty much almost all goods
that are being consumed by ushere in the US, and so the
challenges at the time were thatall the containers were pretty
much distributed around theworld.
Ports got closed, shippingroutes got disrupted, and so
(11:44):
what happened at the time wasthat there was just simply not
enough containers in the world,number one because of
disruptions, but also, secondly,because everybody stayed home
and started ordering goodsinstead of spending their money
on services, and so onlineordering increased and online
shopping increased substantially.
So ultimately, that just meantnot enough containers in the
(12:05):
world.
Prices increased dramaticallyfor containers, both on the
primary market, so at thefactory level, but also on the
secondary market for endcustomers, so very hard to buy a
container, and if you found it,it was very, very expensive.
That meant that all theshipping lines ordered more and
more containers in the years 21,22 from the factories directly,
(12:28):
creating an almost oversupply,and so once COVID was over, we
had too many containers, and soall that supply basically meant
prices decreased substantiallyover 50% for containers again,
both on the primary market andthe secondary market, and
availability was greateverywhere.
(12:50):
And so, you know, last few yearshave been a fantastic time to
buy containers, especially, youknow, 2023, 2024.
And now what we're seeing is,you know, the market has
stabilized a little bit more.
We're seeing, you know, notCOVID-like challenges in the
(13:11):
world, but we see things like,you know, the Panama Canal
drought.
We see the Red Sea crisisdisrupting trade, we see an
increased economic strength ofChina, so they want their
containers back, and so all ofthose things ultimately mean
that for 2025, we predict thatcontainer supply will be
(13:33):
restrained again, so supply willdiminish, it will be harder,
and we also see a price increasehappening.
It's hard to predict how muchit is and how long this will go
on, but we predict for the next12 to 24 months we'll see
increasing prices.
Speaker 1 (13:49):
Do you anticipate any change in container
availability or pricing due tothe shifting political winds in
the US and around the world?
I know 2024 was a big year,administrations coming and going
and trade relationshipschanging.
Do you see that as a factor atall going forward?
Speaker 2 (14:16):
going forward.
It's very hard to predict rightnow, because the new
administration has promised toimplement tariffs also on China,
mexico, canada.
We don't yet know if thosetariffs will actually be
implemented and to what extentand how that will affect global
trade.
I think what I would say isthat we do believe that the new
(14:37):
administration really focuses onderegulation, and so I think
this will benefit modularbuilding companies, and
especially container buildingcompanies, substantially,
because I think things like ADUsand other temporary buildings
or even backyard offices, thingsthat required lots of permits
before, I believe, sooner ratherthan later, those kind of
(15:01):
restrictions will actually easeup a lot, and I think that's
what we should be focusing onand what the Modular Building
Institute, I think, should belooking forward to, is making it
easier to build, makingconstruction easier, getting
easier permits, and that's whatwe're looking forward to.
Overall and I had mentioned thiswith the macroeconomic
(15:23):
challenges, like the Red Seacrisis, I think these have the
biggest impact, more maybe thanthe new administration, and I
think those kind of challengeswon't change anytime soon.
They will always pop up.
I think that's also why itbecomes increasingly important
for anyone that buys containersin the United States, and
(15:46):
especially your partners at theInstitute to make sure they have
a resilient supply chain tocircumvent any possible
disruptions, and so I thinkthat's what we're trying to help
with as well, and making sure,no matter how big the challenges
are, no matter what thedisruptions look like on a
(16:07):
macroeconomic basis, we canalways provide containers,
because we see the market trends, we look ahead, we work
directly with shipping lines,not with local traders.
Speaker 1 (16:21):
We work directly with factories and we can plan for
those things.
I know that we've talked aboutthe global state of the market
and I certainly encourage anyonewho has not read your white
paper to do so.
I thought it was fascinating.
For those who haven't had timeor may not be able to make the
time, what were some of the mostnotable findings in that report
?
Did anything surprise you whenyou were doing your research for
(16:43):
it?
Speaker 2 (16:44):
I think, generally we saw huge demand for container
buildings.
I think the number is somethinglike 4.4 million online
searches in the first half ofthis year specifically for
container buildings on Google.
We were surprised by, I think,the scale of that number, to be
(17:05):
honest, and we see that thosetrends continue to increase.
I think we also saw that moreand more different use cases for
containers are popping up.
So, of course, you know youhave container housing, you have
container offices.
We see more and more, you know,leisure spaces, garden leisure
(17:26):
spaces, um, you know, gardenoffices, outdoor gyms, um, we
see more and more use cases, youknow, by by large organizations
.
So, for example, retailers thatuse containers for you know, as
micro fulfillment centers fortheir stock.
We see, um, container pools,even things like that, um and um
(17:50):
, yeah, I think container pools,even things like that, and yeah
, I think the breadth ofdifferent use cases that we see
is something that I was amazedby and maybe on the more
challenging side, some of thedata we saw is that over half of
the businesses that sourcecontainers to build a house with
(18:13):
or to construct a containerbuilding continue to talk to
three or more differentcompanies at any time, and
especially at the moment whenthey already need the container,
and so that just means to me.
The market is so fragmented onthe container supply side.
(18:34):
It's still very, verychallenging for a lot of your
partners and container buildersto find the right suppliers, the
suppliers that they can trust,the suppliers that have the
supply available, the suppliersthat provide fair prices, and
that's also, I think, what wewere a bit surprised about.
Speaker 1 (19:00):
For those who are building container buildings now
and NBI has several membersthat do that and do it very,
very well, building all kinds ofbuildings, as you mentioned Are
there any other insights youcan share from your side of the
industry, specifically for thesebuilders going into 2025?
Speaker 2 (19:14):
I mean.
So I think I think generally,the fundamental benefits of
building with containers arefinancial savings, speed to
completion and improvedenvironmental outcomes, and is
also something that we discussedin our report, I think.
So resilient supply chain isobviously key.
(19:38):
I think it's in everybody'sinterest to build as quickly as
possible with quality containers.
I think we also always need toremember that there are big
differences even betweendifferent factories in China
that manufacture containers, soyou want to make sure you work
(19:58):
with the right partners.
You don't wanna source a lowgrade container for somebody to
live in, and so I think, yeah,resilient supply chain is the
most important aspect, and then,of course, speed.
It's also what we've seen 50%cheaper to build with containers
on average than with othermaterials.
(20:18):
And I think you know finding apartner that can get the
containers to you fast can getyou new containers, but also old
containers, and we see you knowa lot of use cases, especially
on the retail side.
Speaker 1 (20:33):
You mentioned the grading of containers low grade
versus high grade.
Certainly I'm sure mostbuilders want high grade
containers.
For those who are getting intothe market or who are unfamiliar
, is there a way to go aboutranking or valuing these
different grades of containers?
How does one do that homework?
Speaker 2 (20:53):
So I think obviously the biggest question for a
builder is you know, how oldshould the container be that you
build with?
That's number one.
And, again, huge differencesbetween a container that comes,
you know, directly from thefactory pretty much, whereas a
container that's five years old,10 years old, 15 years old.
So I think number one is youknow, ask how old the container
(21:17):
is, to make sure.
Ask how old the container is,to make sure.
Number two I think it will beextremely difficult, working
with local traders, to get anyinformation on the quality grade
of the container or at whichfactory it was produced.
This is something that you canonly really find out if you
(21:40):
source the containers at thefactory directly, right, if you
build the containers or you workwith the shipping lines
directly.
So this is something that wecan help with.
Or you know, of course, youknow you can always, I think, go
to the yard and inspect thecontainer, but it will, I think
you know, for someone whodoesn't come from the industry,
be extremely difficult.
So this is just one of the bigchallenges.
(22:00):
You know why this industry isso introspective for customers
and something that we want toaddress.
Speaker 1 (22:08):
Where do you see the container construction market
going in the next three to fiveyears?
You mentioned the hope forderegulation.
That would be great foreverybody, but how do you see
that sort of going witheverything that's going on now,
and in what sectors do youanticipate the most growth?
Speaker 2 (22:25):
So we continue to see strong demand for container
houses.
So I think number one, we'reseeing container construction
becoming more and moremainstream.
Container construction becomingmore and more mainstream.
The partners that I visitedover the last month built
everything from ADUs to housesto offices.
(22:47):
I think pretty much everybodyhad their order books full.
If I talk to them now, then wesee feedback that new customers
would have to wait a few monthsbefore they can fulfill the
orders, and that's not becausethe construction of the
container takes so long, it'sbecause the order book is full.
We love that.
We want to help our partnersgrow, make sure they have access
(23:11):
to the right containers at alltimes, and that's our job.
Right, and I think that's onepart.
The other part is, especially2025, 2026, I think also a huge
demand for retailers.
We see retailers moving awayfrom using big warehouse space
(23:32):
that is extremely costly, wherethey still have to ship their
goods from the warehouse totheir shop.
We see more and more of themusing small storage areas behind
their stores, micro-fulfillmentcenters and things like that,
and so I think, in summary,continued demand on the consumer
side, increasing demand on thebusiness side, both across
(23:58):
containers that are not modifiedand containers that are
modified in them.
Speaker 1 (24:04):
What is the process for working with BoxHub you
mentioned at the top?
You wanted to be the sort ofthe Amazon marketplace for
containers.
You work with consumersdirectly and with businesses.
What is that process forworking with BoxHub and what
should your potential customersexpect from you?
Speaker 2 (24:22):
So if you are a consumer, you want to buy one
container, two containers, feelfree to give us a call or simply
just go on our website.
It's the process, you know,takes a few minutes.
All the information that youneed is there.
Pricing is online.
You can simply put in your zipcode, check out just like you
(24:43):
would on Amazon.
You then get an email and anonline account where you can
choose your delivery dates andthen the container will show up
on your preferred delivery date.
As simple as that.
For companies that want tosource more containers and more
containers more regularly, wehave account managers that help
you with every step in theprocess.
(25:04):
Case that you need, they willhelp you plan in advance.
If you know that your orderbook looks, you know, very full
(25:28):
in March, then you know we willplan with you in advance
sourcing containers at the righttime.
We can source containers, youknow, in current or we can build
containers in whatever coloryou want, for example, at the
factory level, um, because ittakes a little bit longer, but
we can do that, um, and so youknow, just give us a call, uh,
visit our website, you know,fill out a form and you will get
(25:50):
, kind of a container expertfrom our team that will work
with you directly.
Speaker 1 (25:54):
So what's?
What's next for Boxhub Um weexpect to continue to grow.
Speaker 2 (26:01):
We're operating nationwide in the US right now,
also very, very important, right.
So you know we have a lot ofcustomers that have multiple
sites across the country, eitherconstruction companies
themselves, the constructionsites or any other type of
business.
So we are nationwide.
At some point next year, Ibelieve, we will expand
(26:24):
geographically.
Looking at europe next, andthen you know we also more and
more sell container accessories.
We focus more on selling reeferunits or refrigerated
containers, selling reefer unitsor refrigerated containers,
specialty units, which meansopen sides, open top containers,
things like that, and so ourplan is to geographically expand
(26:47):
one and then secondly expandour product range.
Speaker 1 (26:51):
Well, this has been a fascinating dive for me into
the container constructionmarket.
I really appreciate your time,Max.
I'm very much looking forwardto seeing what the future holds
for BoxHub and the wholecontainer building sector.
So thanks again for your time.
I really appreciate it.
Speaker 2 (27:06):
John, thank you so much.
It was a real pleasure to be on.
Speaker 1 (27:10):
My name is John McMullen and this has been
another episode of InsideModular, the podcast of
commercial modular construction.
Until next time.
Hello and welcome to Inside Modular, the podcast of
commercial modular constructionbrought to you by the Modular
Building Institute.
Welcome everyone.
My name is John McMullen.
I'm the marketing director hereat MBI.
Today I'm joined by Max Berner,ceo at BoxHub.
Max is here to talk about thestate of the shipping container
market and how his company ishelping to facilitate
(00:22):
container-based construction.
Max welcome.
Speaker 2 (00:26):
John, pleasure to be here.
Speaker 1 (00:28):
Thank you so much.
Tell me about yourself, max,what's your background and what
led you to co-founding Boxhub.
Speaker 2 (00:35):
Yeah, so my background is really tech and
specifically, tech startups.
I founded my first company whenI was 21, back when I was still
living in the UK.
It was a marketing platform atthe time that we later
successfully sold.
After that, I took a few yearsoff, then thought I, you know, I
(00:56):
really want to focus on doingsomething good for the world.
So I, at the time, moved to theMiddle East, to Jordan.
There was a Syrian refugeecrisis going on at the time and
I thought I really want tosupport and help with that
situation, and so I co-foundedanother company there called
Nawa, which helps funneldonations to the right charities
(01:19):
in the region in the region.
And after that, again, I tooksome time off and I was very,
very lucky in 2017 to run into aguy called Philip.
Philip used to work for Maerskand Maersk affiliate companies
for almost 12 years and Philip,through his experience at Maersk
(01:42):
and in the shipping industry,came up with the idea for BoxHub
.
He told me about it at the time.
I loved it from the get-go andI joined him shortly after to
build BoxHub in the UnitedStates.
Speaker 1 (01:55):
Wow, that's quite a background.
So what is BoxHub?
What's its purpose, how does itwork?
Speaker 2 (02:01):
BoxHub really tries to address how traditional
container companies sell theircontainers to end customers, and
so there are huge challengesbecause historically there's not
been any technology used and soit was very, very difficult and
a tedious process for any typeof customer.
And so that could be a consumer, could be a farmer, could be a
(02:24):
retailer, could be aconstruction company to source
and buy containers and get themdelivered.
Before Boxhub, the only way fora consumer or customer to buy a
container was to find the localcontainer yard and drive to the
container yard, negotiate withthem and then hope that the
container gets somehow delivered, which is obviously a very 21st
(02:47):
century experience.
And we thought in the future,most people buy online and
certainly everybody's used toplaces like Amazon and other
online shops, and so we wantedto bring the of like the Amazon
style shopping experience tobusiness and consumer customers
(03:08):
for containers.
So those customers buycontainers for multiple
different use cases.
The majority of them is simplestorage, but another big use
case is, of course, modularhousing and modular construction
.
Another big use case is alsojust to buy them to use them to
move somewhere else later, butin any case, all of them we
(03:30):
wanted to address and we wantedto provide with the perfect
online and offline experience.
That was one part of the idea.
The other piece of BoxUp is thatall the containers, before they
get handed down via offlinewholesalers and local traders
and local container yards andthen to the end customer.
(03:50):
All of them are pretty muchowned by big shipping lines and
there's 40, 50 extremely largeorganizations in the world that
own 40 million shippingcontainers that are used for
trade.
And Philip's experience at MERSshowed that these huge
(04:11):
organizations sell their oldcontainers every year, millions
of containers but they don'treally have a team or are not
really set up to sell those veryefficiently and he saw that
from inside a shipping line.
And so the other piece ofBoxHub is actually making it
easier for shipping lines andfor large container owners to
sell their containers.
(04:31):
So, in summary, one, we want tomake it super easy for anyone
to buy containers and get themdelivered and secondly, we want
to make it super easy for thebig container owners, the
shipping lines and the containerfactories to sell them, and we
are that connection in between.
Speaker 1 (04:46):
I'm curious what drew you as an entrepreneur?
What got you excited about theshipping container industry?
Speaker 2 (04:53):
Yeah, I thought I was immediately amazed by how
little technology had beenimplemented in this industry
over the last five to ten yearscompared to most other
industries the financialindustry, the insurance industry
, uh, e-commerce, shopping,logistics pretty much most
(05:14):
industries had had beendisrupted with technology in the
last years.
The shipping industry andspecifically the shipping was in
a trade had not been at all.
I thought it was a greatopportunity.
I think you know I want tospend my time with something
that creates value.
I want to build companies thatmake people's lives easier or
(05:38):
better in some way, and Ithought this is a huge problem
that hadn't been addressed.
And by using technology andsimple tactics and strategies
that are used by othertechnology companies, by simply
implementing that in theindustry, you can make a lot of
leeway, and I think we've grownsince 2017 spectacularly in the
(06:00):
US, with a leading marketplacenow for shipping containers, and
I think our reviews are by farthe best in the industry, and I
think it's a testament to us notusing technology just because
we want to, but using technologyspecifically in a way that
makes everybody's experiencebetter.
Speaker 1 (06:21):
So how does this industry work exactly from
behind the scenes?
I know you, your partner,philip, saw a lot of this from
his experience.
How does this industry work?
What's the life cycle of acontainer from start to finish?
And I'm really curious how doesa container go from being
shipped from port to port, beingowned by one of these, these
(06:43):
large companies, to being partof a building?
Speaker 2 (06:46):
Most containers, almost all containers, are
produced in China.
There are a few countriesnowadays that have also new
factories, including India or,for example, vietnam, places
usually where also things likeclothing increasingly gets
produced nowadays.
So the factory would producethe container at the request of,
(07:08):
let's say, a shipping line.
The shipping line picks thatcontainer up, brings it to
another factory in, let's say,shanghai, where it is filled up
with goods for Walmart that havebeen produced there.
From there it goes to the portbeing loaded on a big container
ship and then shipped over to,let's say, long Beach.
Long Beach is unloaded, put ona truck and then the truck might
(07:29):
drive inland up to Salt LakeCity or Denver or Texas, where
it goes directly to Walmart andthe goods are unloaded there.
At this point the containerowner so the shipping shipping
line decides to either bring thecontainer back to long beach on
(07:50):
a truck and then ship it backto china, or it decides to store
it at a local container yardand then, historically, that
container would have been soldby the shipping line to to an
offline wholesaler.
The offline wholesaler mightsell the container to another
offline trader or container yard.
(08:10):
It's being brought there by atruck and then at the other yard
, that other company puts amargin on top and the end
customer can buy it there.
That was basically historicallyhow the industry worked.
We think obviously, as Imentioned before, there's a lot
of challenges with that.
Number one.
We do not want the container tobe brought back empty to China
(08:33):
in the first place A hugeenvironmental impact that we
want to reduce and huge costsalso for shipping lines.
$15 to $20 billion a year arespent on sending containers
empty back to places like China.
Year are spent on sendingcontainers empty back to places
like China.
And of course, you knowhistorically, if you have a lot
of local traders, a lot ofoffline wholesalers, it creates
(08:53):
a lot of intransparency andprice.
Everybody puts a marginsomewhere and ultimately also
the experience is not great forcustomers.
So we try to work directly withthe shipping line and we tell
them don't send a containeranywhere.
Try to work directly with theshipping line and we tell them
don't send a container anywhere.
We will take it from youexactly in the place where the
Walmart is, where you unloadedit, and then we create a
(09:19):
transparent market where pricesare easy to see online and we
find customers for you in thatmarket and thereby reducing
repositioning and also cuttingdown the moves, even between
yards.
Speaker 1 (09:27):
BoxHub has just published a white paper that I
was lucky enough to see.
Thank you very much for sendingit and the white paper dives
into the state of the shippingcontainer market and the
changing ways that shippingcontainers are being used.
What can you tell me about howthis report came together and
where did the information comefrom?
Speaker 2 (09:47):
Yeah, so we of course have a huge customer base, lots
of different customers, lots ofdifferent use cases.
So a lot of the information inthat report comes from first
party data, so from our owncustomers.
We run surveys, we look atstatistics, we visit our
customers, talk to them, wevisit our suppliers in the
(10:09):
shipping lines and talk to them.
So there's a lot of data thatcomes from primary sources.
Of course, we also use a lot ofthird-party data, for example
from the Modular BuildingInstitute, and then you know
other research macroeconomicresearch, and then other
research, macroeconomic research.
So it's a combination ofdifferent data points and
(10:32):
ultimately, I just spent thelast month actually visiting
quite a lot of modular containerbuilding companies.
We also talked to them toreally understand trends, what
they're looking for.
Speaker 1 (10:48):
Well, fantastic.
I'm glad you have all that Inyour recent memory.
I would love to ask you aboutthat.
So what is the?
The current state of the, thecontainer is industry.
Have you seen it?
What trends are have you beenseeing over the past few years
and what are you seeing now?
Speaker 2 (11:00):
So container industry generally has changed a lot, I
would say, since 2020 2020.
As we all know, covet started.
They had huge supply chaindisruptions across the entire
world, right, and so we all knowthat containers are being used
(11:20):
primarily for global trade, forpretty much almost all goods
that are being consumed by ushere in the US, and so the
challenges at the time were thatall the containers were pretty
much distributed around theworld.
Ports got closed, shippingroutes got disrupted, and so
(11:44):
what happened at the time wasthat there was just simply not
enough containers in the world,number one because of
disruptions, but also, secondly,because everybody stayed home
and started ordering goodsinstead of spending their money
on services, and so onlineordering increased and online
shopping increased substantially.
So ultimately, that just meantnot enough containers in the
(12:05):
world.
Prices increased dramaticallyfor containers, both on the
primary market, so at thefactory level, but also on the
secondary market for endcustomers, so very hard to buy a
container, and if you found it,it was very, very expensive.
That meant that all theshipping lines ordered more and
more containers in the years 21,22 from the factories directly,
(12:28):
creating an almost oversupply,and so once COVID was over, we
had too many containers, and soall that supply basically meant
prices decreased substantiallyover 50% for containers again,
both on the primary market andthe secondary market, and
availability was greateverywhere.
(12:50):
And so, you know, last few yearshave been a fantastic time to
buy containers, especially, youknow, 2023, 2024.
And now what we're seeing is,you know, the market has
stabilized a little bit more.
We're seeing, you know, notCOVID-like challenges in the
(13:11):
world, but we see things like,you know, the Panama Canal
drought.
We see the Red Sea crisisdisrupting trade, we see an
increased economic strength ofChina, so they want their
containers back, and so all ofthose things ultimately mean
that for 2025, we predict thatcontainer supply will be
(13:33):
restrained again, so supply willdiminish, it will be harder,
and we also see a price increasehappening.
It's hard to predict how muchit is and how long this will go
on, but we predict for the next12 to 24 months we'll see
increasing prices.
Speaker 1 (13:49):
Do you anticipate any change in container
availability or pricing due tothe shifting political winds in
the US and around the world?
I know 2024 was a big year,administrations coming and going
and trade relationshipschanging.
Do you see that as a factor atall going forward?
Speaker 2 (14:16):
going forward.
It's very hard to predict rightnow, because the new
administration has promised toimplement tariffs also on China,
mexico, canada.
We don't yet know if thosetariffs will actually be
implemented and to what extentand how that will affect global
trade.
I think what I would say isthat we do believe that the new
(14:37):
administration really focuses onderegulation, and so I think
this will benefit modularbuilding companies, and
especially container buildingcompanies, substantially,
because I think things like ADUsand other temporary buildings
or even backyard offices, thingsthat required lots of permits
before, I believe, sooner ratherthan later, those kind of
(15:01):
restrictions will actually easeup a lot, and I think that's
what we should be focusing onand what the Modular Building
Institute, I think, should belooking forward to, is making it
easier to build, makingconstruction easier, getting
easier permits, and that's whatwe're looking forward to.
Overall and I had mentioned thiswith the macroeconomic
(15:23):
challenges, like the Red Seacrisis, I think these have the
biggest impact, more maybe thanthe new administration, and I
think those kind of challengeswon't change anytime soon.
They will always pop up.
I think that's also why itbecomes increasingly important
for anyone that buys containersin the United States, and
(15:46):
especially your partners at theInstitute to make sure they have
a resilient supply chain tocircumvent any possible
disruptions, and so I thinkthat's what we're trying to help
with as well, and making sure,no matter how big the challenges
are, no matter what thedisruptions look like on a
(16:07):
macroeconomic basis, we canalways provide containers,
because we see the market trends, we look ahead, we work
directly with shipping lines,not with local traders.
Speaker 1 (16:21):
We work directly with factories and we can plan for
those things.
I know that we've talked aboutthe global state of the market
and I certainly encourage anyonewho has not read your white
paper to do so.
I thought it was fascinating.
For those who haven't had timeor may not be able to make the
time, what were some of the mostnotable findings in that report
?
Did anything surprise you whenyou were doing your research for
(16:43):
it?
Speaker 2 (16:44):
I think, generally we saw huge demand for container
buildings.
I think the number is somethinglike 4.4 million online
searches in the first half ofthis year specifically for
container buildings on Google.
We were surprised by, I think,the scale of that number, to be
(17:05):
honest, and we see that thosetrends continue to increase.
I think we also saw that moreand more different use cases for
containers are popping up.
So, of course, you know youhave container housing, you have
container offices.
We see more and more, you know,leisure spaces, garden leisure
(17:26):
spaces, um, you know, gardenoffices, outdoor gyms, um, we
see more and more use cases, youknow, by by large organizations
.
So, for example, retailers thatuse containers for you know, as
micro fulfillment centers fortheir stock.
We see, um, container pools,even things like that, um and um
(17:50):
, yeah, I think container pools,even things like that, and yeah
, I think the breadth ofdifferent use cases that we see
is something that I was amazedby and maybe on the more
challenging side, some of thedata we saw is that over half of
the businesses that sourcecontainers to build a house with
(18:13):
or to construct a containerbuilding continue to talk to
three or more differentcompanies at any time, and
especially at the moment whenthey already need the container,
and so that just means to me.
The market is so fragmented onthe container supply side.
(18:34):
It's still very, verychallenging for a lot of your
partners and container buildersto find the right suppliers, the
suppliers that they can trust,the suppliers that have the
supply available, the suppliersthat provide fair prices, and
that's also, I think, what wewere a bit surprised about.
Speaker 1 (19:00):
For those who are building container buildings now
and NBI has several membersthat do that and do it very,
very well, building all kinds ofbuildings, as you mentioned Are
there any other insights youcan share from your side of the
industry, specifically for thesebuilders going into 2025?
Speaker 2 (19:14):
I mean.
So I think I think generally,the fundamental benefits of
building with containers arefinancial savings, speed to
completion and improvedenvironmental outcomes, and is
also something that we discussedin our report, I think.
So resilient supply chain isobviously key.
(19:38):
I think it's in everybody'sinterest to build as quickly as
possible with quality containers.
I think we also always need toremember that there are big
differences even betweendifferent factories in China
that manufacture containers, soyou want to make sure you work
(19:58):
with the right partners.
You don't wanna source a lowgrade container for somebody to
live in, and so I think, yeah,resilient supply chain is the
most important aspect, and then,of course, speed.
It's also what we've seen 50%cheaper to build with containers
on average than with othermaterials.
(20:18):
And I think you know finding apartner that can get the
containers to you fast can getyou new containers, but also old
containers, and we see you knowa lot of use cases, especially
on the retail side.
Speaker 1 (20:33):
You mentioned the grading of containers low grade
versus high grade.
Certainly I'm sure mostbuilders want high grade
containers.
For those who are getting intothe market or who are unfamiliar
, is there a way to go aboutranking or valuing these
different grades of containers?
How does one do that homework?
Speaker 2 (20:53):
So I think obviously the biggest question for a
builder is you know, how oldshould the container be that you
build with?
That's number one.
And, again, huge differencesbetween a container that comes,
you know, directly from thefactory pretty much, whereas a
container that's five years old,10 years old, 15 years old.
So I think number one is youknow, ask how old the container
(21:17):
is, to make sure.
Ask how old the container is,to make sure.
Number two I think it will beextremely difficult, working
with local traders, to get anyinformation on the quality grade
of the container or at whichfactory it was produced.
This is something that you canonly really find out if you
(21:40):
source the containers at thefactory directly, right, if you
build the containers or you workwith the shipping lines
directly.
So this is something that wecan help with.
Or you know, of course, youknow you can always, I think, go
to the yard and inspect thecontainer, but it will, I think
you know, for someone whodoesn't come from the industry,
be extremely difficult.
So this is just one of the bigchallenges.
(22:00):
You know why this industry isso introspective for customers
and something that we want toaddress.
Speaker 1 (22:08):
Where do you see the container construction market
going in the next three to fiveyears?
You mentioned the hope forderegulation.
That would be great foreverybody, but how do you see
that sort of going witheverything that's going on now,
and in what sectors do youanticipate the most growth?
Speaker 2 (22:25):
So we continue to see strong demand for container
houses.
So I think number one, we'reseeing container construction
becoming more and moremainstream.
Container construction becomingmore and more mainstream.
The partners that I visitedover the last month built
everything from ADUs to housesto offices.
(22:47):
I think pretty much everybodyhad their order books full.
If I talk to them now, then wesee feedback that new customers
would have to wait a few monthsbefore they can fulfill the
orders, and that's not becausethe construction of the
container takes so long, it'sbecause the order book is full.
We love that.
We want to help our partnersgrow, make sure they have access
(23:11):
to the right containers at alltimes, and that's our job.
Right, and I think that's onepart.
The other part is, especially2025, 2026, I think also a huge
demand for retailers.
We see retailers moving awayfrom using big warehouse space
(23:32):
that is extremely costly, wherethey still have to ship their
goods from the warehouse totheir shop.
We see more and more of themusing small storage areas behind
their stores, micro-fulfillmentcenters and things like that,
and so I think, in summary,continued demand on the consumer
side, increasing demand on thebusiness side, both across
(23:58):
containers that are not modifiedand containers that are
modified in them.
Speaker 1 (24:04):
What is the process for working with BoxHub you
mentioned at the top?
You wanted to be the sort ofthe Amazon marketplace for
containers.
You work with consumersdirectly and with businesses.
What is that process forworking with BoxHub and what
should your potential customersexpect from you?
Speaker 2 (24:22):
So if you are a consumer, you want to buy one
container, two containers, feelfree to give us a call or simply
just go on our website.
It's the process, you know,takes a few minutes.
All the information that youneed is there.
Pricing is online.
You can simply put in your zipcode, check out just like you
(24:43):
would on Amazon.
You then get an email and anonline account where you can
choose your delivery dates andthen the container will show up
on your preferred delivery date.
As simple as that.
For companies that want tosource more containers and more
containers more regularly, wehave account managers that help
you with every step in theprocess.
(25:04):
Case that you need, they willhelp you plan in advance.
If you know that your orderbook looks, you know, very full
(25:28):
in March, then you know we willplan with you in advance
sourcing containers at the righttime.
We can source containers, youknow, in current or we can build
containers in whatever coloryou want, for example, at the
factory level, um, because ittakes a little bit longer, but
we can do that, um, and so youknow, just give us a call, uh,
visit our website, you know,fill out a form and you will get
(25:50):
, kind of a container expertfrom our team that will work
with you directly.
Speaker 1 (25:54):
So what's?
What's next for Boxhub Um weexpect to continue to grow.
Speaker 2 (26:01):
We're operating nationwide in the US right now,
also very, very important, right.
So you know we have a lot ofcustomers that have multiple
sites across the country, eitherconstruction companies
themselves, the constructionsites or any other type of
business.
So we are nationwide.
At some point next year, Ibelieve, we will expand
(26:24):
geographically.
Looking at europe next, andthen you know we also more and
more sell container accessories.
We focus more on selling reeferunits or refrigerated
containers, selling reefer unitsor refrigerated containers,
specialty units, which meansopen sides, open top containers,
things like that, and so ourplan is to geographically expand
(26:47):
one and then secondly expandour product range.
Speaker 1 (26:51):
Well, this has been a fascinating dive for me into
the container constructionmarket.
I really appreciate your time,Max.
I'm very much looking forwardto seeing what the future holds
for BoxHub and the wholecontainer building sector.
So thanks again for your time.
I really appreciate it.
Speaker 2 (27:06):
John, thank you so much.
It was a real pleasure to be on.
Speaker 1 (27:10):
My name is John McMullen and this has been
another episode of InsideModular, the podcast of
commercial modular construction.
Until next time.
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