Uncontainable: Should you use shipping containers for your startup?
Lately, we’ve noticed a lot of start-ups using containers for reasons other than shipping. Containers are being used to house laboratory equipment, office space and even small-scale farms. In the climate tech world, containers are being used to build plants, and you might have seen some pictures of these plants at work.
With all of the buzz, it’s understandable to wonder whether shipping containers might be a good choice for your own start-up. We were curious as well, so we put together a survey designed to get founders’ opinions on the shipping container trend. We’ve pooled together some of the more notable responses into this article, to help anyone who might be on the fence figure out what’s right for you.
📈 Why are we seeing this trend?
As we transition to a NetZero economy, we’re seeing two mega-trends: decentralisation and modularity.
We believe that energy production in the future will be more decentralised, meaning that production facilities will be placed closer to the site of energy consumption. This allows for demand flexibility, letting producers respond more nimbly to fluctuations in renewable energy supply and demand. Placing energy sources close to consumers also helps offload the transmission grid, increasing efficiency.
When we talk about modularity, it’s usually in the context of ramping up production capabilities. Unlike in the past, energy producers aren’t building monolithic plants, instead choosing to ramp up production by set units. What this means is that when building a 1GW plant, production will start smaller and be ramped up in units of 50MW or 100MW. This is because the underlying technology hasn’t yet been scaled up, such as in the case of electrolysers and lithium-ion batteries. That means that any tech being built to support this trend needs to be modular. It needs to be relatively easy to add pieces to the technology to ramp it up, like building a structure out of Lego blocks.
Building decentralised and modular plants requires a bit of flexibility, something that shipping containers offer. Shipping containers are built to be transportable, which means they can easily be moved to locations closer to consumers. They’re also built to standard sizes, meaning that in theory, it should be possible to swap containers out as needed. And they can be retrofitted relatively quickly to fit your needs. This quick start-up time and natural transportability are why containers helped play a role in managing the recent coronavirus pandemic.
Given all of that, it’s no surprise that start-ups have started making use of shipping containers too. But while that all sounds good in theory, how well do shipping containers hold up in real life? To answer that, we turn to our survey respondents.
The pros and cons of container use
We gathered feedback from over a dozen of start-ups, all either currently working with containers or strongly considering using them for their projects. From their responses, we’ve summarised the following pros and cons to container use.
✅ Pros
Containers are easily transportable. Because containers are built to be loaded onto trucks and ships, the entire container and its contents can easily be transported from the manufacturing site to the customer and from customer to customer.
Containers are sturdy. Shipping containers are made to withstand rough conditions, so they can last a long time before they start to break down.
Containers are standardised and readily available. Containers come in fairly standard sizes, regardless of where you source them from, so work done on one container can be replicated in another container. Because they’re so commonly used for shipping purposes, they’re easy to find (especially secondhand), and not very expensive.
Temperature and humidity can be controlled. A container is essentially a single, contained room. With a few modifications, the temperature and humidity of that room can be adjusted to fit your project’s needs. These parameters can be set to different values for multiple containers, as needed.
Containers are modular. Containers work great for technology that’s still in a scaling phase, because of their modularity. They can be used to gradually scale up technology until goals are reached.
Containers can reduce your carbon footprint. Containers can be obtained secondhand, essentially recycling a container taken from a shipping company. Since containers are pre-built, buying a container secondhand saves you from having to build the space for your plant yourself, reducing your overall carbon footprint.
Containers look good. Shipping containers look nice and modern, particularly when well-lit, cleaned, and decorated with the company logo. While this may seem like a minor pro, never underestimate the importance of a professional appearance when it comes to funding applications.
❌ Cons
Containers are heavy. They’re usually made of steel, which adds a lot of weight to the container. Loading and unloading the containers requires a crane, which can add to the expense.
Containers can rust. Because containers are made of steel, rust is possible. Considerations will need to be made for weatherproofing and maintenance to make sure your containers last for a long time.
A standardised shape isn’t always ideal. Containers work best for projects that can fit into the container’s standardised shape. Projects with different requirements may require modifications to the structure of the container, which can become expensive.
Modifications can be expensive. Depending on your project’s needs, you may find the cost adding up. While minor modifications like climate control may not be that difficult, larger modifications can quickly cause the price of the container to balloon. We talk more about the cost in the following section.
Modularity has its limits. Although containers are modular, at some point, when the technology has matured and the scaling phase has finished, you will need to ditch the container approach to meet your new demands.
ℹ️ Other things to consider
While shipping containers are mostly standardised, there are still some slight differences in containers which you will need to consider. We’ve put together a summary of our survey responses, to give you a glimpse of the range of possibilities. Where possible, we’ve indicated which options come standard with containers, and which require modifications or some custom building.
Doors. 1–2 doors come standard. Some respondents reported as many as 7 doors in their container setup.
Materials. All respondents indicated that their containers were made of steel.
Size. The most common container sizes reported in the survey were between 20 and 40 feet.
Maintenance. This varies depending on what the container is used for. Respondents suggest that containers may need periodic inspections to check seals and electric installations. These inspections may be every six months or annually.
Maintenance comes with associated costs, which range from $500 to $1500 plus travel. Even if periodic maintenance isn’t necessary for your project, you will still need to watch out for rust build-up, which means budgeting for the occasional rust removal.
Weatherproofing. Depending on where and how you set up your containers, you may need weatherproofing. This could be as simple as covering the container with a tarp, or it could include installing insulation and door seals or investing in corrosion-resistant coatings. This represents an additional cost, so consider carefully what sort of weather proofing your container needs.
Regulations. Certain regulations may apply, depending on what you use your containers for. You will probably need to comply with local fire safety regulations, or you may need to obtain certifications, like ATEX, if your technology comes with any explosion risks, or Pressure Equipment Directive (PED) compliance if you use any pressure equipment.
👉 Will containers work for you?
On the surface, containers seem to have more advantages than disadvantages. Modular plants can be helpful for start-ups developing new technology, and containers can be cheap, so if you know that containers will suit your needs and you can keep the cost of your set-up down, containers might work well for you. However, this recommendation does come with a few important caveats. Container costs do vary quite a lot, with our respondents spending between $3000 (just for buying them) and $40000 for an entire set-up, and if you would like to stay on the lower end of that range, there are some important things to consider.
Containers cease to be modular the minute they require support functions, which can add significantly to the cost of the container. Remember that containers are designed for a specific purpose, and changing or altering the container’s design could end up costing you more than if you built the right facility from scratch. And if your project requires multiple containers to be assembled together to create a functioning plant, your container set-up is no longer scaleable.
Container costs also vary depending on where and how you source your container. Many of our respondents sourced their containers secondhand, either through a container agent or from shipping lines, which significantly brought down costs. Others built their containers from scratch or ordered bespoke containers from manufacturers, which increased costs significantly.
So if you can obtain a container secondhand and use it without too many modifications, and your technology is currently in the scaling-up phase, containers could work out for you. But if you find yourself needing a container custom-made to your needs or you find yourself making modifications to the entire structure, you should carefully consider whether your container is worth the cost.
🤝 Our Verdict
We recommend containers, with some caveats. First, you should consider the cost of the container in relation to your needs. If you can purchase a container secondhand and use it without too many modifications, then full steam ahead! Containers could be a cheap and convenient option for your start-up. However, if your technology is no longer in the scaling-up stage, if you need multiple containers working together, or if you need to make extensive modifications to the container itself, you should first consider whether cheaper alternatives exist before getting on the container ship.
And second, before purchasing your container, you should make a plan for what you will do when containers no longer work for you. You might find, for example, that a container works well for your 10kW, 100kW, and 500kW units, but once you scale up to 1MW, a container would no longer be suitable for you. Know at what point you’ll need another solution, and have a plan in place for when that day comes. You’ll save yourself a lot of time and energy in the future.
