Is buying a shipping container a wise investment?

Is buying a shipping container a wise investment?

Banks are paying the lowest term deposit interest rates in a generation – somewhere between 2.5% and 4%, depending on amount and term. And there is considerable trepidation about where the sharemarket will head.

So why not broaden your investment horizons and buy a shipping container or two, leasing them and getting a 12% per year guaranteed return?

This is one of the hot offerings being advertised online and in some airline magazines by a Brisbane-based group called Own Your Own Shipping Container (OYOSC), which represents Pacific Tycoon, based in Hong Kong.

What’s the deal

According to the online marketing blurb, an investor can hand over $US4100 (the $A price varies with the exchange rate) to buy a 40-foot (about 13-metre) shipping container backed by ownership documents from OYOSC.

The container is immediately leased, according to Corr Piccone, of OYOSC. He says there are no other out-of-pocket expenses such as management, insurance or payment-processing fees, which are paid by Pacific Tycoon. The container has an average lifespan of 15 years.

The deal is that the investor receives a “guaranteed” 12% per year, paid quarterly. The push is on for investors to buy five of these containers. Then the price comes down to $US4000 apiece, in which case you get a return of 12%pa paid monthly.  This is called a fixed-plan lease. The containers must be paid for with cash.

There is also an “aggressive deployment plan lease”, under which the leasing company sublets the containers on short-term contracts generating a higher income stream. This return is variable so there are no guarantees. But Piccone says that to date this system has consistently outperformed the fixed-return option and has earned more than 20%pa over the past two years.

Investors don’t know where the container goes or what it carries. But they are told that it is insured against damage or loss. This assumes that the insurance is actually in place and that the insurer will pay up.

Other benefits

Subject to your own accounting advice, the containers may qualify for a 10% annual depreciation allowance. It’s painted as a trouble-free investment: you pay the money, sit back and wait for the returns to roll in.

What’s the downside?

This is an unregulated investment. Piccone says that because investors are buying a physical asset, no prospectus or regulation is required. The Australian Securities & Investments Commission (ASIC) won’t comment on the scheme or whether it has received any complaints.

Piccone and Helen Thomas, who appears to be his partner, have been involved in selling property and ATM machines or leases for some years.

Investors who own a container for three years can sell it back to Pacific Tycoon at the original purchase price. If investors want their money back before three years, they will get market value for the used container. The container has to be taken out of hire and inspected for damage.

Piccone says he can’t give an exact figure for a one-year to three-year buyout figure but estimates that it would not be less than 20% below the amount paid.

Investors are dealing with a company based overseas, apparently in Hong Kong, with no physical office in Australia to visit if anything goes wrong. Piccone says the company operates out of two or three homes or apartments in Brisbane.

There is nowhere investors can view their container – not that this means much since they all look much the same anyway!

If anything goes wrong – if, for instance, the returns are late – the only contact is an email or phone call to Piccone.

The corporate regulator would no doubt say the investment is unregistered and based abroad and therefore not its responsibility. Getting financial compensation if anything goes wrong would involve taking legal action in Hong Kong, which is likely to be an expensive exercise with an uncertain outcome.

A guaranteed return of 12% sounds great in today’s investment climate. It is more than four times what you would earn on a term deposit, and that should indicate a fair element of risk.

Pros

An attractive return on an asset that is not linked to sharemarket gyrations or interest rate cuts. No loans are involved so there are no margin calls or mounting debt difficulties. Investors can’t lose more than what they put in.

Cons

It’s an unregulated scheme with no physical head office accountable to anyone in Australia.

My call

For me, alarm bells were ringing when I was about halfway through reading the online offer document and my view is that it is a gamble.

50 Comments - Write a Comment

    1. Hi

      Has anyone heard of purchasing Vcomms ?
      i have purchased a set and to be honest they have not missed a beat

      I was thinking of purchasing more but was hoping to talk to someone else who had done the same.???

      Reply
  1. Surprisingly not many people have heard of this Venture/To further discourage investment by Mum and Dad investors the H.O. is in Hong Kong which we all know is a very dodgy place for business/In Australia the contact people operate out of homes and it would be nigh impossible to contact them once your CASH has been received/I honestly wish it was an above board legal enterprise because the returns are fantastic/A big thank you to the author who reported on this Enterprise

    Reply
  2. Under fixed plan lease the deal is that the investor receives a “guaranteed” 12% per year, paid quarterly. This is undoubtedly an attractive rate of return on investment. But fact remains that business investment in Hong Kong is full of uncertainty and risk. Thorough investigation may be needed to ensure credibility of return from clients who are already involved in such venture and satisfied with the results. Thanks

    Reply
  3. I have read with interest the comments made by all concerned in this post. I can fully endorse the need for due diligence and a general belief that investments in containers seem too good to be true.

    I was in the same position as the title of this article, “Is buying a shipping container a wise investment?” Well after some months of investigating I finally generated a leap of faith and bought 20 containers. I was extremely happy with my decision and have subsequently purchased another 45 containers, some with Pacific Tycoon and some through Davenport Containers.

    I am not a novice investor and did considerable homework. Before continuing however I would point out I did not buy my containers through the company mentioned in this article. I purchased them directing through Pacific Tycoon.

    I have come to know the people running the business. I have spoken to Pacific Tycoon about this company in Australia. They tell me they are aware of them but are not connected to them.

    Un be known to me I received a bonus check from Pacific Tycoon when friends of mine bought some container via my introduction. I am assuming (but do not know for sure) that this Australian company may facilitate the purchase of the container through PT and then receive their introduction bonus for the purchase from PT. A fair business practice I would say and a task/business that could easily be undertaken at home.. (I always offer the bonus back to my friends if and when they buy but that is not my business).

    I have been extremely happy with PT, their paperwork is faultless, they are always available to answer your questions, always ring you back, always have their monthly accounts on time (but usually before time) and always send out your monthly payments on time in what ever currency you want. I have a friend who has been with PT for just under 4 years. I too wondered if this would be a Ponzi scheme, but given my friend had been with them so long and as I did my own research I was quietly confident.

    Another point I would like to make is there is indeed a lot of chatter on forums about PT and some bad comments from one person in particular. In my research, even in the forums I was unable to find one person who could actually could claim they had bought containers from PT and then lost money as a result. From my perspective (and I accept there may have been comments I missed) all negative comments came from people who assumed it must be a fraud and with the loudness of repetition it morphed into fact.

    The website alluded to in the first comment section refers to “Scamnet” from the WA government who start off their assessment with WA

    “ScamNet has never received any reports of monetary loss to sea container investment schemes but blog threads suggest there are people who have lost money and what has been a genuine line of business now appears to be a target for scammers.”

    The CBA initially stopped my money transfer (for 5 days) because they said people had complained about this company. On further questioning the CBA (reluctantly) admitted that none of the complaints had actually come from people who had gone through with their transaction and that none of the people who had sent money had complained???

    Again I agree with everything in the article that suggests you need to do your own research and that there are people ‘out there’ who are more than willing to steal your money. I still did my own research even though my friend had been receiving a very good income return for 4 years.

    There are other things I could say about PT, where they have actually saved me money and accepted less than I would have expected given the change in the US/AU dollar exchange but I realise my comments have been long. I hope this has added some little balance to the assessment on this site, with PT at least. There is always a balance between risk and reward. Thanks for your time. James McKay

    Reply
    1. Dear James, thank you for posting a reply, which I have found to be very educational and informative. I’m currently looking into the same type of investment and have been studying it for some time with reluctance due to the nature of the investment and all the info on the internet around the same subject, which is somewhat confusing.
      I would like to specifically ask you two questions, the first being, which company did you find more professional in terms of service and which of the two (Davenport, PT) provided you with the highest ROI?? Have you also had an opportunity to sell back any of the containers you purchased? If so, how much less was it as compared to your original purchase price?? Thanks for your help!

      Reply
      1. I’m interest in this investment to but how do I find anyone who has put money down and can show proof that its not a scam

        Reply
    2. Hi James.
      I invested with PT about 5 or 6 months ago. Everything was flawless until this last month when the deposit never appeared in my account. I’ve emailed them several times and it appears that they’ve stopped responding. I’m still trying to believe that they’re PT is legit but right now I have cold feet. The other very interesting thing is that lately, every time it’s time for a payment to come through, PT insists on selling me more containers. Although that could be coincidental, I find it odd.

      Please tell me what you think.

      Reply
      1. 14 June 2016

        Abraham same story with us. Worked fine for about 18 months. Nothing in May, PT squeezing us to change over to used containers. I am not interested. They are not responding to my instructions to buy out at market value. Better get some qualified help quick.

        Reply
      2. Hi Abraham
        I have also invested heavily in PT containers and the last payment I received was in April. I have read similar situations from other people. We should form a group and take legal advise about recovering our investments. barryrgg@yahoo.com.au

        Reply
      3. Hi Abraham,

        I had the same problem with payments since April 2016. I have been with PT for 2 years now and payments have been paid on time on the 23rd of every month. I have since been paid for May and June (got paid for June in advance) and look forward to my payment in July.

        I have also got in contact with another investor in Montreal (got his details from a forum) who confirms he has since been paid as well.

        The issue I have been told is to do with these panama paper data leak which caused banks to be more cautious with international payments and led to delays. I have a friend who I introduced to PT this year and he is waiting for 3 months payments by next week.

        I have found the best way to contact PT is via phone – asking for the customer care team gets me through everytime.

        For anyone who wants to see proof of income – I am happy to share this. Please email me directly for this – zahir.choudhury@gmail.com

        I will be more comfortable after 23rd July once I see payments coming through automatically again.

        Zahir

        Reply
        1. Hi Zahir,
          I have some savings amount, which i saved through my salary of 2 yrs, which is as similar as technician package..

          I have been through blogs and comments, and got to known that earlier PT has performed well, but from last some months there are issue facing by investors..

          Please can you advise, seeing the current ongoing condition of PT.. about investing in this company..

          Reply
    3. Hello
      I have just received an email from Richard Liu ,compliance PT informing me that my June return will be a “little late”,with no explanation when it will be paid. Performance before for 12 months has been good.
      Now I am concerned that there is a real risk of default.

      Reply
  4. Thank you James for your comments. I would like to conduct my own research into this business. Can you please post a few tips as to how to go about doing this.
    Kind Regards,
    Ashley

    Reply
  5. Interesting reading! I currently have 78 containers with PT, and most of them for 3 yrs, some 2 and some less just whenever I could I’d buy some more. Can’t fault the company or the returns. they have been up there in the early 20% but coming down a bit now ,some are still in high teens. Paid on the same day each month 100% of the time and emailed income statement each time. The statement tells you how each batch of containers is returning. they are grouped together as you purchased them. If you bought 1 this time and 9 next time, they have when you bought them, when they were commissioned, what total return they earned and then your share and what it’s worth in dollars, then your % on investment. I am currently terminating the agreement on some of the containers to pursue some other interests so that will be the final test. Good luck with it. Cheers.

    Reply
    1. Any luck Ernie?

      I’m in a different situation where I may negotiate to have access to second hand containers to lease or even sell and came across this article

      Obviously this is a different scenario where you buy a brand new container off PT or a company and rent them out. James Mckay above mentioned buying his containers from Davenport and PT untiled them which I thought wasn’t possible. Obviously they just want brand new containers. None the less this is an interesting opportunity.

      Would love to hear back how you went and also if you had any knowledge of any corporations whom lease second hand containers. Any advice is appreciated.

      Best of luck Earnie. Cheers

      Reply
      1. Hi Abraham,
        Not all good on the termination, I have a schedule for 15 of my containers. They say 2 or 3 per month will be paid but already 3weeks overdue, said they have sorted it and was going to be last Monday,, nothing.
        Might be all tied up with this hold up with their bank but my contract says they would pay purchase price 6 wks after notification, that was over 3 months ago.
        I also have 48 containers in another name, they say they’re having trouble finding buyers for large number. These are also meant to be purchased by Pacific Tycoon under my 2013 contract. They are certainly dragging the chain at best. I have bad thoughts about it all at the moment! Time will tell, waiting for June payment.
        Cheers,
        Ernie.

        Reply
        1. Hi Ernie,
          I have some savings amount, which i saved through my salary of 2 yrs, which is as similar as technician package..
          I have been through blogs and comments, and got to known that earlier PT has performed well, but from last some months there are issue facing by investors..
          Please can you advise me, seeing the current ongoing condition of PT.. about investing in this company or not ??

          Reply
  6. I contacted them expressing interest from New Zealand to get a prompt reply that this offer is not available to us based on our location here in New Zealand… I’m wondering why’s that since its an international company with investors from our Neighbors in Oz… and the shipping container goes all over the world… can anyone comment on this??? What other countries are investors based in – eligible, and not eligible???

    Reply
    1. New Zealand regulation is more open to going after offshore Ponzi scheme. ASIC in Australia is mandated to only go after financial products and services.

      As this is not a financial service like the old Ponzi scheme they have found a loophole in the Australian regulations to sell this type of Ponzi scheme.

      Two important things to think about when investing in offshore investments like this in addition to the ones mentioned in the article.

      First can they fund the investment through debt? As debt is by far a better corporate way to funds growth than equity. In Asia debt is very cheap at the moment and under 10%, so why would any company give away 12% guaranteed? They are straight up losing money and don’t need your money unless they can’t get a loan which is very bad because financials aren’t in order then.

      The second is to understand the product you’re buying and the completion. As you’re buying containers it would be smart to look up how the top container shipping companies are doing. Very quickly you will learn that the industry is currently in a massive oversupply and a shipping prices are at all time lows and companies are moving freight at below cost just to payoff debt, so it’s a very bad time to be buying containers.

      Screams a Ponzi Scheme and any original investor is incentivised to buy more or get others to invest to keep the Ponzi scheme going.

      Ponzi scheme

      A form of fraud in which belief in the success of a non-existent enterprise is fostered by the payment of quick returns to the first investors from money invested by later investors.
      “a classic Ponzi scheme built on treachery and lies”

      Reply
  7. Depreciation. This has been overlooked. Original investment of 4100$ is worth 0$ after 15 years. So if you calculate 12% yearly over 15 years minus loss of original investment 4100$ it comes out to about 5% return annually.

    Reply
  8. I have been with PT since Oct 2014 , from a recommendation, with ongoing successful results of a friend . The commission a $2,200 inc GST was paid to a company” Australian Mortgage Solution”s no matter if you bought 1 or more. I thought I would have more accountability, if it was an Australian agent dealing on my behalf rather directly with PT.The cost per unit was $3600 ea I bought 5 at the then aggressive plan not the now guaranteed monthly plan . Up to July 2015 the monthly return was excellent between 24% to29.14%. In June there was a 5 day delayed payment followed by a descending drop in 2015 August 14.25% Sept 7.62 % since then up till now in May the return has been under 3.6 % . The explanation was the units were in a contract far away from Beijing and I would need to pay approx $1000 US per unit to ship them back to have them in a better contract. The only other offer by one of the directors was for me to buy 5 more to join the original 5 to get them into a contract a the new Beijing Airport…this did not bode well to get out of my dormant units I had to buy more! . I was initially told if the units were away and out of circulation the most it would be is for 2-4 months . It has been 7 months now and I am waiting to get my original money out in Oct 17.(if this will be possible) I would like to hear from others who have sold any or especially all of their unit investments? The communication about my situation has been poor from the directors and when they do it is not with emails(except their offers to buy more) but by phone, (so there is no paper trail?). There is no other offered solution, they are unable to sell my units second hand as they will have to get them back to sell and there has to be a demand for second hand units. They do sell second hand ones as they have offered them to us $3900 instead of new $4100 . I have serious reservations about the PT company from my experience only. Like others have said, do your homework. I did not do enough. ASIC has on record (Doc no 028297145) ACN 167335944 a listing for Pacific Tycoon PTY LTD ends in Oct 2016(3 years) signed by one director, Xavier David Holden born 11/5/1956. Google that name and form your own conclusions.

    Reply
  9. Hi All

    Have any of you heard anything about Vcomms ? and investing in them through Big Picture Alternatives. Any thoughts ?

    Reply
  10. It’s a straight forward Ponzi scheme.

    They are going to payout original investors until it fails, so everyone who gives testimonials saying they are getting paid without any issue is true but one day no one will get paid and it’s just a ticking time bomb.

    As it’s not a financial product e.g. stock investment, they have found a loophole to avoid regulatory watchdogs like ASIC as they cannot step in or tell people not to send there.

    I’m still astonished how greedy some people are and these things are still going on. Good luck to the investors but I would be pulling my money out as fast as possible as your 12%investment returns are only the funds from any new investor.

    When a bank or foreign exchange broker advises they cannot send to that bank account (100% it’s dodgy) they’re unfortunately not allowed to tell clients that the bank account is linked to a Ponzi scheme because it’s illegal to tip off the investor as they may tell the Ponzi scheme.

    Reply
  11. I brought a total of 17 containers and I stopped receiving payments in May, they have stopped answering my emails. I think some of us have been scammed terribly. Can we get together and try to recover our investments

    Reply
    1. Hi Barry i purchased 4 containers 2 years ago. Received my statements and payments on time until may this year. I spoke to Chinese lady today and said they were relocating my containers and it takes 6 months to do so. So much for containers in command. She also said they where having trouble with there money conversion people and should be fixed soon Dont know about this.

      Reply
  12. I have been in contact with PT and have had to make multiple phone calls and email to get my monthly deposits. They’re saying that it is because of the Panama document scandal that many Banks have tightened up their wire regulations but I have no way of knowing if that’s the case.

    They still keep sending me the monthly statement as before but then don’t follow up with the deposit as promised.

    Reply
  13. I have 200 containers returning over 27% which I’ve had for nearly a year. Payments over the past few months have been delayed a little, but paid up to date.

    I visited PT in Hong Kong mid April at very short notice and was given a tour of their office, every question I had was professional answered by the team, who I have to say knew the business and industry very well. they explained how their computer system operates and links customer billing right through to investor payments, basically fully automated. The whole visit was very professional and hospitable.

    A month ago I had a call from their Deputy Director of Operations Mr Canaris who hosted my visit in April saying they were having to do a number of investor payment manually due to banks questioning / rejecting overseas payments post the Panama scandal and apologised for any delays I have or may experience.

    He said as you saw on your visit the system is automatic and they don’t know without manually reconciling bank payments to the system it was not obvious who has or hasn’t had payment stopped. This he said is taking a considerable number of additional personal to carry out this operation, but they were doing everything they can to rectify the situation, but they have some 7000 investors.

    One of my payments was stopped by my bank wanting the usual ID checks, passport etc, my tax reference and said until they were sure everything checked out, the revenue were happy tax was being accounted for the payment would not be released. PT were more than helpful doing another transfer for the full amount by a different method and said when the other payment is released they would adjust it on future payment.

    I have other businesses that trades internationally and have had a similar problems with a payment from South Africa. Banks as usual believe our money is in fact their money and they can do as they please, unfortunately governments have given them the power to it more so now under the guise of money laundering, which has nothing to do with it, it’s just making sure they get every penny in tax!

    I was introduced to PT by a friend who has a reasonable number of containers acquired over an 18 month period, the oldest now nearly 3 years, always paid on time and PT have been very professional to deal with. He has like many of us experienced some delays, but is paid up to date. He also has some containers under performing, PT issued him with new ones on a contract giving more expected returns, saying when the other kick back in we’ll swap the new one’s out, he is currently receiving income on both sets albeit the under perfuming ones are only returning 3%-4%.

    I can only speak as I find and have witnessed. In my view PT is a very professional operation of some 14 years, and just like many business at one time or another are experiencing some difficulties.

    Reply
    1. Hi Taylor,
      I have some savings amount, which i saved through my salary of 2 yrs, which is as similar as technician package..
      I have been through blogs and comments, and got to known that earlier PT has performed well, but from last some months there are issue facing by investors..
      Please can you advise me, seeing the current ongoing condition of PT.. about investing in this company or not ??

      Reply
  14. Hi Ernie

    Can you please give us a update with the termination of your contract with PT?we are also investors and have been getting the run around the last month with out payments.We are just coming up to the end of our 3 year contract with PT in November and were wanting to sell off our containers and just wanted to know how you were getting on with it?

    Thanks Neil

    Reply
  15. Hi Taylor,

    I can tell you have a lot of experience dealing with PT … you mentioned that you bought 200 containers ! this is a huge number.
    How easy is it to liquidate it and get cash ? Have you tried to sell or get cash out for some of these ?
    Thanks
    Sam

    Reply
  16. Hi All,

    Do not believe this hype, I purchased 20 containers from Pacific Tycoon in Honk Kong in 2014 under the aggressive lease returns for the fist year were 16% and 7.85% for the second year, this hardly 20+ % that is being promised, I also had issues after the 2 year lease was up when I tried to liquidate my investment, had to threaten them with legal action before my money was returned. Invest at you pearl but you have been warned.

    Reply
  17. I was about to go into this investment. I had to search hard and long to find out the truth.
    there were hundreds of people preaching about the amount they made each year. The number of people talking, boasting, bragging, confirming -> whatever you want to call it, made it sound legitimate.

    Basically, if you buy a shipping container, YOU WILL get a %% paid yearly.

    But here is the kicker. Noone gets their initial investment back. So you put in $5000. They might pay you $750 a year… for 3 years. So you get a total of $2250. Thats all you get. Your deposit is gone.
    BUT here is what is smart. If they just took your money, nothing back, you would tell the world and noone else gets sucked in. But because you are getting paid, and getting 15% back, you get your family, friends, work colleagues to all join in. You might even withdraw from your home loan, to put it into the investment, because home loan rates are under 5%, while you are “earning” 15%. But now, all the people that you brought in, now also bring in others. So instead of getting $5k…. YOU end up getting the scammers $100k – $1million.

    In part of my research I did find a comment about a big investor, talking $100k+, he mentioned it was strange, it seems that the “call center” was based in one country, but met up in another. He got to meet them at an office, everything looked legit. Invested big money, went back a week later, the office was ‘gone’. Truth was, the office was a room to rent short term, etc. Everything was fake.
    Alot of people earning now, will find out the hard way. It IS a ponzi scam. There are NO shipping containers. The money will stop flowing to you one day, and your initial investment is gone.

    Reply
  18. Please reinstate the DATA BASE back into MONEY MAGAZINE—-extremely important to determine how sectors are performing—

    Thank You,
    Christopher.

    Reply
  19. I have not seen any thing to indicate you get your money back in any off these comments. if you get 20 % return for 3 years you are still 60% out of pocket. In that 3 years you tell your friends about the great returns and suddenly they have more money. Why would they give you your money back after 3 years the containers are now 2nd hand?

    The old saying if it sounds too good to be true then it is.

    Reply
  20. It’s a fair dinkum Ponzi scheme. Bloody obvious if you read through the threads and see the initial returns decline to zero with no culpability or legal recourse. It’s one for the mugs.

    Reply

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