I rushed in where Phil Herndon dares to tread. I hate to tell customers “No,” and it seemed to have become a weekly event to apologize to customers that we were unable to move a loaded container. So, after consulting with my Advisory Board, aka “the Wingnuts,” I ordered twelve 16' “White Boxes” from Universal Storage Containers last fall. They arrived a few weeks ago, and I am now officially in the Mobile Storage/Local Moving business.
I will leave the pondering of the pros and cons of getting into the business to my more cerebral colleagues. Also, the Mobile Storage component of my business is far too young to share reliable statistics. Rather, I'll address what went through my mind once my White Boxes were delivered… “OK, what now?”
What should I call these things?
Although I've heard others in the industry refer to them as White Boxes, that term has no meaning to consumers. And unfortunately, PODS, the generic term by which consumers refer to Mobile Storage products and services, is a registered brand of the national competitor. Unable to think of a pithy brand name of my own, I opted for something descriptive instead, “Residential Containers.” Furthermore, per friends already servicing this market, there are as many customers who use these as a more attractive, on-site storage solution as there are customers who actually use them for cross-town moves. So, I stayed away from moving-specific monikers.
Do I need an MC Number?
We have a DOT number, but are registered as “Not for Hire.” I called the FMCSA information line and, according to them, we would only need an MC number if we were crossing state lines with freight for hire. So, since we are only offering local service, no MC number is needed.
What about insurance?
We require customers to release us from liability for the contents. However, there is a scenario where, should an accident occur while the unit is in transit under our control and the contents are damaged, we could be held liable. But, it's tough to get Cargo Insurance when you are a private, “not for hire” carrier. I spoke to Chuck Mangum of the Leavitt Group about the issue and, for a nominal annual fee, we were able to add insurance that covers the Residential Containers, including the contents of others, which did not exclude “in transit.” So, now we are always covered.
Do I have the right equipment to handle these units?
Per our request, Universal manufactured our units with 12” fork pockets 68” apart, same as a 20' Container. So, our current forklift handles the boxes with no needed adjustment. We have two rollback straight trucks. With the optional wheels installed on the Residential Containers, either truck can easily winch up fully loaded unit - so, no issue with trucks.
My only complaint so far is that these units are more delicate than shipping containers. We cannot handle them as roughly as we do ISO Containers, and I'm worried about stacking them in Oklahoma where a storm can kick up at any time. They are lightweight and do not nest together. So they take up disproportionately more yard space than our other products, un-stacked and spread apart to prevent damage.
How much should I rent them for?
I base my return projections on an 80% occupancy rate. At competitive rates in my market, 20' Containers produce a 30% return, and 40' Containers produce a 26% return. I decided to price the Residential Containers (RCs) at a 29% return, as an introductory rate. Eventually, I plan to raise them to a 35% return. Because I do not expect them to have the lifespan of a new ISO Container, they need to produce a greater return.
How should I advertise the Residential Containers?
We dedicated a page on our website to the RCs (Residential Containers) and I was considering running an ad in local real estate magazines. However, after having them only a few weeks, 5 of 12 units are already rented. We did nothing in the way of advertising, but we are now able to say “Yes” instead of saying “No”…and the market is finding us.
So call me foolish, but I've expanded into a new market, and increased same-site revenue potential with very little investment and only increasing overhead by the cost of the added insurance. I dove in and, so far, the water feels fine.
Jay Williams — Budget Box Mobile Storage— [email protected]boxtulsa.com — www.budgetboxtulsa.com — 918-234-3444 — Fax: 866-634-6697