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With the increasing reliance on global commerce, the international market for container shipping is expected to surge from almost $7 billion in 2020 to almost $16 billion by 2028, according to a study published by global data provider Statista earlier this year. While the numbers vary wildly, it is estimated that the total number of shipping containers in use worldwide is now between 5 million and 170 million.

Relatively affordable, a used shipping container can be purchased for less than $2,000, while the cost of a basic new container should run between $3,000 and $4,000. The life span of a shipping container used at sea is approximately 10 to 12 years, but if well maintained, one can last over 25 years.

If you are a boater and active near shipping lanes, you know that shipping containers have been lost from container ships at sea and can be a hazard to navigation. But, what happens to the rest of the containers no longer in active use?

Repurposing them has emerged as a billion-dollar industry, and multiple uses now take advantage of their strength, resilience, compactness, affordability, stackability and relative portability.

Beyond their primary use for shipping — maritime, rail and trucking — the most obvious alternative use is general storage, both on- and off-site as stand-alone units.

Companies have taken alternative uses even further, converting the containers into mobile, rentable offices with electricity, lighting and temperature control. Other businesses, consistent with the tiny house trend, have converted shipping containers into homes, even stacking them for additional living levels, or placing them adjacent to each other and connecting them for larger square footage.

There also are firms that use shipping containers to create commercial venues for shopping, restaurants, food courts and entertainment. Shipping containers also have been used to construct pedestrian walkways and tunnels, swimming pool enclosures, solar energy systems and more.

These alternative uses support the preferred approach to waste management: reduce, reuse and recycle. But not surprisingly, the devil is in the details. Even with the best of intentions, alternative uses need to comply with local requirements that vary with the jurisdiction, the physical location, the type of property, the modifications, and the intended end use of the shipping container.

Considerations When Planning to Use a Shipping Container

Although a container itself is generally portable and self-contained, and even if it is being used solely for storage purposes, it may violate the covenants, conditions and restrictions of an office, industrial or retail project if placed there.

Even if the covenants, conditions and restrictions permit storage containers, those same covenants, conditions and restrictions are likely to have requirements regarding the placement, color, use, visibility and screening of the container. If used for something beyond basic storage, a building permit likely will be required to address requirements and threshold considerations along the lines of the following:

• Conformance with height, setback and lot coverage requirements of accessory structures within the land use designation of the property;
• Whether a container is for temporary or permanent use;
• If the container is supplied with electricity, water, gas or sewer utilities, a separate electrical, mechanical or plumbing permit may be required;
• If containers are to be stacked, used for residential purposes, or supplied with utilities, there’s a good chance a permanent foundation system will be required;
• Sprinkler systems may be required; and
• Accessibility requirements may need to be satisfied for public or multifamily uses.
• If hazardous materials are stored in a container, the use may require higher levels of approval and security, e.g., there may be requirements at the local and state government level, as well as compliance with the U.S. Environmental Protection Agency and Occupational Safety and Health Administration requirements.
• If the container is on property that has other structures of historical significance, the placement of the container may require review by historical resource groups.

Additional Considerations

The California Department of Housing and Community Development has created a program to review, preapprove and certify certain factory-built housing, which may include containers. Containers that obtain HCD certification can avoid some local government requirements, but containers intended for housing without HCD certification will be subject to additional requirements.

As an example, in March, the Development Services Department of the City of San Diego prepared Information Bulletin 149, which explains the permitting requirements for repurposing cargo containers as buildings, provides some deference to containers with HCD housing certification, and provides additional guidance for noncertified housing uses and nonhousing uses.

The International Code Council develops building safety codes that are accepted and used in the U.S. and internationally, including the International Residential Code and the International Building Code. Appendix 3 of its 2021 International Building Code published new guidelines applicable to shipping containers, and augments the ICC’s 2019 G5 guideline for the safe use of International Organization for Standardization containers.

These guidelines are intended to address the growing trend of repurposing containers, and to fill the void where local jurisdictions and administrative programs have failed to update their regulations and compliance requirements to address the trend. The guidelines attempt to help owners, architects, builders and engineers assess design and approval requirements of shipping containers as a building element.

The availability and positive attributes of shipping containers are expanding opportunities to use them creatively for a variety of projects and purposes. Yet it is a mistake to presume that the simplicity of their form and function means they can be used without regard to oversight and approvals by governmental agencies and other owners within a project subject to covenants, conditions and restrictions.

Before engaging in the use of shipping containers for a purpose other than shipping, it would be prudent to investigate the requirements applicable to the intended use and to the specific location.

Steven Otto is a partner at Crosbie Gliner Schiffman Southard & Swanson LLP. The article was published in Law360 (subscriber only).