By Eric Peterson | Dec 04, 2017
Used shipping containers
Industry: Supply Chain
Products: Shipping container sales
"The container supply really depends on what's going on in the world," says Halsch.
So the story goes: There was a container surplus during the Great Recession, but the economic comeback of the past five years has pushed demand and prices upwards. The annual market is approaching $10 billion worldwide, and most containers are owned by leasing companies and shipping lines. But it's an unwieldy industry, and shifts in global trade can result in an oversupply in one hemisphere and a deficit on the other side of the planet.
With an office in Denver and a storage lot in Erie, Overcon sells and leases used 20-foot and 40-foot containers of several different grades of quality. Beyond Colorado, the company markets containers to customers in Los Angeles, Houston, Memphis, and Savannah, Georgia and sources them from all over. "We buy them from steamship lines and leasing companies," says Halsch.
Market dynamics vary widely from region to region and container to container. "It's a volatile market," he says. "Right now, we're seeing a tightening of the market. China is buying containers like crazy." A container that might wholesale for $1,000 in Chicago could fetch more than $2,000 in another city. In a terminus location like Denver, more containers come in than are needed for local industry, giving Overcon a steady local supply to sell and lease on the retail market.
"We've seen a dramatic price increase [from September 2017 to November 2017]," says Halsch. Overcon's prices have resultantly jumped from about $2,500 to $2,700 per container.
Before going into the container business, Halsch studied petroleum engineering at Colorado School of Mines (where he played a year of Orediggers football as a freshman in 2011). But his prospects for a career as an petroleum engineer dwindled with the price of a barrel of crude, so he began marketing containers on Craigslist in summer 2015. Halsch had worked in sales since high school and found there was simply a need for capable intermediaries.
"Leasing companies don't want to deal with retailers," he says, a disconnect that means containers often sit in storage yards rather than go to the highest bidder. "What I saw was a very big lack of customers service in the industry."
The market has responded to the model. Overcon's sales doubled from $500,000 to $1 million in 2016. Crediting VP of Sales Matt Yamane, a 15 percent owner, Halsch forecasts sales of $2 million in 2017.
In 2017, Halsch launched RoxBox, a "cargo architecture" company focused on modifying shipping containers into mobile beer bars as well as for residential, office, and other uses, with co-founder Mike Lassers.
Challenges: "Expansion," says Halsch. "Our biggest challenge is finding enough used containers to sell to our clients." When the global economy is hot, the quality of available boxes can suffer, he adds.
Opportunities: Continued growth. A new partnership with a global container company gives Overcon a presence in 16 locations as the demand for used containers continues to increase.
Needs: "Investors," says Halsch. "We've kicked the ball around with a few people, but nothing concrete yet." He says he's looking to partner with investors who are "not equity-level," but people interested in a "royalty-based deal."