What does Depreciated Residual Value (DRV) mean?

What is Depreciated Residual Value (DRV)?

The DRV (Depreciated Residual Value) is the value per container that the user will pay the supplier in case the containers cannot be returned after the units have been on-hire for over 365 days or are damaged beyond repair. It's the amount a container is worth after considering how much its value $$$ has decreased over time.

How do you calculate the DRV?

• The Minimum DRV is calculated by multiplying:
  • Newbuild Price * Minimum Replacement % = Minimum DRV
  • For example
    
    • 2,000 USD * 70% =1,400 USD Minimum DRV
      
      
• But we also run the numbers of a Calculated DRV that considers the depreciation rate:
  
  • Newbuild Price * Depreciation Rate% = Depreciation per year
  • For example
    
    • 2,000 USD* 3%= $60,00
      
      
• Then we take into account the Age (YOM):
  
  • Age * Depreciation per year = Depreciation Total
  • YOM: 2020 (which gives a total age of 3 years)
  • 3 years * $60,00 = $180,00 Depreciation Total
    
    
• This sum is deducted from the newbuild price:
  • $2,000 -  $180 = $1.820,00 Calculated DRV

Minimum Replacement Value

• The DRV cannot be lower than the minimum replacement value (Minimum DRV).
  
• Following our same example, if the minimum replacement value is 70%, then a container with a new built price of $2,000 can’t become worth less than $1,400 (70% of $2,000) even after it is fully depreciated.
  
• This newly calculated value is the value used in case of a total loss claim.