Moveable cash cows
09 Jan 2008
Sub-letting of temporary storage structures could prove and important revenue stream for wiley port operators. Stuart Pearcey explains
Sophisticated modern temporary storage solutions can provide port operators with semi-permanent means to maximise assets by adding value to the most humble part of their operation, even if it is only an expanse of concrete or Tarmac.
Don’t be fooled by the ‘temporary’ tag; the buildings available today defy the dictionary definition, and can offer lives spanning into decades. One supplier promises that the building will be hard at work long after the employee who ordered it has retired; another bases its entire manufacturing operation in two of its own structures. Furthermore, they can be of a scale appropriate to port operations, offering area and the necessary height, given the availability of ground area.
And therein lies the key to potential long-term benefit for port operators. Once the transitory need of one company is past, then another may be presented with a similar issue, and the ‘temporary’ building hired in by the port authority can be sub-let once more, presenting a semi-permanent means of adding value for port operators.
The workablility of the solution to delivering high-quality storage becomes clear when the financial implications of ‘temporary’ are compared to ‘conventionally permanent’, though the rules may differ depending on which country you’re working in.
However, temporary buildings offer keen advantages over permanent ones:
- They’re quicker to install, with simpler planning procedures;
- They don’t tie up company cash;
- Lead times are considerable shorter;
- Lease payments are an expense line, rather than a depreciating asset, making accounting simpler;
- They don’t tie up credit lines, which remain available for other business needs;
- Their cost is not influenced by interest rate changes;
- There are no residual or disposal costs’
- And liabilities aren’t increased.
But there is also no long-term commitment; if the temporary storage requirements dry up, then the building can simply be dismantled and taken back by the supplier until such time as a similar solution is needed again.
Terms and conditions naturally vary depending on the supplier, but it’s not impossible have a temporary building on site and working within 72 hours of the first call, but when you’ve finished with it, it can be gone within seven working days. Its acquisition is no more difficult than buying or hiring any other item.
Says Antony Hunt, managing director of Smart-Space Buildings: “We want to make hire as flexible as possible, so we don’t have any up-front charges, there’s no minimum rental period, and we bill monthly in arrears. Not only that, but we charge on a weekly basis using a sliding scale, so the longer the building’s on your premises, the cheaper it becomes on a weekly basis.
“It’s in our interest to make the process as simple as possible,” he adds. “We make the process simple. There’s no red tape, no lawyers and no long-term leases, and you pay for the space only as you use it.”
Suppliers of temporary buildings recognise the variety of uses to which their products might be put, and have developed appropriate solutions. For example, a single skin building without appropriate ventilation can be prone to condensation, which potentially harms anything with a degree of porosity, including cardboard boxes. But they’ve worked around that by offering double-skin insulated buildings with different ventilation options.
Operators’ maintenance costs are reduced because the buildings are virtually maintenance-free, and lighting costs are kept to a minimum, during daylight at least, because of translucent walls and roofs, which allow operations to take place in ‘virtual daylight’.
Furthermore, having more space on site can obviate stock control and logistics problems and costs that might be inherent in an off-site solution, which was recognised by the C&C Group, manufacturers of Magners cider, in Tipperary, Ireland.
Faced with rocketing demand for Magners cider from Europe and the Far East the company could make and bottle it, but had nowhere to keep it in readiness for orders going out.
Their option was to introduce a 7,500 sq ft temporary warehouse with a 6m high roof, a dozen personnel doors, five electric roller shutter doors and 135 mercury lights. John Hayes, the company’s head of logistics, explains the benefits: “Choosing the temporary building solution with Spaciotempo of Uttoxeter provided us with the precise amount of required space within six weeks. Furthermore, we saved significant costs on the project by not having to rent off-site space.”
That application illustrates how speed and efficiency of installation can support a business need. A similar illustration is to be found in the experience of Kingdom Projects, a solid waste processor in North America. Although not a port-based operation, the circumstances serve to illustrate the point.
Having decided on an aggressive expansion plan they were presented with a short window of opportunity in which to buy a new piece of equipment, but had nowhere to put it in the timescale. Their general manager Lon Little takes up the story: “We knew we had our answer when we found a temporary building from a company called Cover-All. The installation took only eight days as compared to numerous weeks with a conventional building.”
The building in question was a 60-foot by 80-foot space that allowed for an increase in production of 30%. “The cost savings were realised in a number of areas,” says Mr Little. “Not only did purchasing the building save us tens of thousands of dollars compared to other buildings, but our operating costs are less because we have little need for lights during the day, and our building maintenance costs are almost nil.”






