CAI International, Inc. operates as transportation finance and logistics company in the United States and internationally. The company purchases equipment, which it leases primarily to container shipping lines, freight forwarders and other transportation companies. It also manages equipment for third-party investors. In operating its fleet, the company leases, re-leases and disposes equipment and contract for the repair, repositioning and storage of equipment. The company’s equipment fleet consists primarily of intermodal marine containers. It also owns a small fleet of railcars, which it leases within North America. The company manages equipment for third-party investors under management agreements that cover portfolios of equipment. It also receives fees for selling used equipment on behalf of third-party investors. Management Services The company leases, re-leases and disposes containers and contracts for the repair, repositioning and storage of its managed fleet. Marketing and Operations: The company’s marketing and operations personnel are responsible for developing and maintaining relationships with its lessees, facilitating lease contracts and maintaining the day-to-day coordination of operational issues. Leases The company leases containers under three main types of leases, such as long-term leases; short-term leases; and finance leases. Long-Term Leases: The company’s long-term leases specify the number of containers to be leased, the pick-up and drop-off locations, the applicable per diem rate and the contractual term. It typically enters into long-term leases for a fixed term ranging from three to eight years, with five-year term leases being most common. The company’s long-term leases generally require its lessees to maintain all units on lease for the duration of the lease, which provides it with scheduled lease payments. A small percentage of the company’s long-term leases contain an early termination option and afford the lessee interchangeability of containers, and the ability to redeliver containers if the lessee’s fleet requirements change. Short-Term Leases: Short-term leases include both master interchange leases and customized short-term leases. Master interchange leases provide a master framework pursuant to which lessees can lease containers on an as-needed basis, and thus command a higher per diem rate than long-term leases. The terms of master interchange leases are typically negotiated on an annual basis. Under its master interchange leases, lessees know in advance their per diem rates and drop-off locations, subject to monthly port limits. The company also enters into other short-term leases that typically have a term of less than one year and are generally used for one-way leasing, typically for small quantities of containers. The terms of short-term leases are customized for the specific requirements of the lessee. Finance Leases: Finance leases provide the company’s lessees with an alternative method to finance their container acquisitions. Finance leases are long-term in nature and require little customer service attention. They ordinarily require fixed payments over a defined period and generally provide lessees with a right to purchase the leased containers for a nominal amount at the end of the lease term. Finance leases are long-term lease contracts that generally grant the lessee the right to purchase the equipment at the end of the term for a nominal amount. Re-leasing: The company typically leases a container various times during the time it manage it as part of its fleet. The company’s 80%-owned subsidiary, CAIJ, Inc., acts as investment arranger for sales of containers by it in Japan and manages container leases for investors in Japan. Customer Concentration: Revenue from the company’s single major lessee, CMA CGM, accounting for 11.4% of total revenue. Seasonality: The company historically experienced increased seasonal demand for containers in the second and third quarters of the year (year ended December 31, 2014). However, equipment rental revenue may fluctuate significantly in future periods based upon the level of demand by container shipping lines for leased containers, the company’s ability to maintain a high utilization rate of containers in its total fleet, changes in per diem rates for leases and fluctuations in operating expenses. Rail Operations Fleet: The company owns a fleet of railcars of various types, including 50 feet and 60 feet box cars for paper and forest products; covered hoppers for grain, cement, sand, plastic pellets and many other industrial products; general purpose tank cars that are used to transport food-grade and other non-hazardous commodities; gondolas for coal; and general service flat cars. As of December 31, 2014, the company owned 2,361 railcars. Leases: The company offers multiple lease options to its railcar customers, including full service and net operating leases, per diem leases, sale/leasebacks and asset based financings. Its full service leases provide its customers with comprehensive management services, including maintenance and the payment of taxes. The company’s per diem lease product enables customers to pay through a settlement process on an hourly and mileage basis. Customer Concentration: The company’s railcar customers are typically industrial companies who ship their products or raw materials by rail. It leases to various different industries and no customer generates approximately 15% of its total monthly revenue. The company’s customers are generally large, creditworthy, industrial companies. Additionally, it works with various North American Class I Railroads and regional carriers. History The company was founded in 1989. It was incorporated under the name Container Applications International, Inc. in the state of Nevada in 1989. In 2007, the company was reincorporated under the CAI International, Inc. name in the state of Delaware.
cai international inc (CAP:New York)
1 Market Plaza
San Francisco, CA 94105
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