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What Are the Benefits of Modular Construction?

benefits of modular construction

As the CEO and Co-Founder of Falcon Structures, I’ve had the privilege of working with modified shipping containers for over 15 years and seen the increasing role repurposed containers play in the modular construction industry. Recently, I came across a toolkit written by Fannie Mae Multifamily that perfectly described the ins and outs of modular construction. Inspired by the information I read in the article; I was eager to share the highlights I found with our Falcon readers. Here’s a brief look into the benefits and disadvantages of modular construction inspired by Fannie Mae.

Who is Fannie Mae?


For context, Fannie Mae has served the secondary mortgage market for 30 years. Their team provides liquidity, stability, and affordability to the multifamily market, and while their toolkit addresses the multifamily market at large, they also focus on the modular construction industry. To read their full toolkit, click here.

What is Modular Construction?

According to the Fannie Mae toolkit, modular construction is defined as a “technique whereby the bulk of the construction of a building is done off-site, and components, sometimes called modules or simply boxes, are then transported to the site and assembled.”

Modular construction is a part of off-site construction, which emphasizes the construction of building material at an off-site location that are later shipped to be pieced together.

What Are the Benefits of Modular Construction?


Did you know that permanent modular construction accounts for only about 4 percent of all new construction starts in the U.S.? Based on the Modular Building Institute, the US lags behind other developed countries around the world. As modular construction continues to grow, a better understanding of the benefits emerges. Here are a few of those benefits:


With modular construction, quality control and consistency improve when compared to traditional construction. This is due, in part, to precise fabrication and established measurements. Fannie Mae clearly states that modular pre-fabrication significantly reduces rework costs. In fact, “among architects and engineers, improved quality was the most commonly reported benefit.”


Thanks to the controlled manufacturing environment associated with modular construction, safety becomes a major benefit of modular construction. Factory laborers have more control and familiarity with their work environment, which increases safety. Data from the U.S. Bureau of Labor Statistics proves that rates for fatal injuries are lower in manufacturing than in traditional on-site construction.



As productivity increases, project timelines decrease, allowing modular builders to make the most of project schedules. In fact, modular products can help reduce a construction schedule by 20-50 percent as companies reduce supply chain issues, “just in time” delivery, and a reduced need for rework.


Fannie Mae pinpoints a statistic discovered by McKinsey that states “up to 80 percent of labor activity traditionally performed on-site can be moved to an off-site manufacturing facility.” Similarly, “fifty-seven percent of activities in construction are wasteful and non-value adding.” So, by transitioning more projects to modular construction techniques, productivity increases across the board.


“Green building” occurs when construction companies make the most of wasted materials or minimize wasting materials when compared to traditional construction. In terms of modifying shipping containers, the ability to repurpose an object that is no longer useful – like a retired shipping container – and using the box as a building element, minimizes wasted containers across the globe.

Go Green with Recycled Shipping Containers

Cost Certainty

As shorter and more manageable project timelines benefit modular construction, significant cost savings follows suit. Based on Fannie Mae’s research, easily repeatable projects, such as student housing and affordable housing, benefit significantly from cost savings.

What Are the Disadvantages of Modular Construction?


Although modular construction comes with many benefits, it is not ideal for every construction project. Here are some disadvantages to keep in mind moving forward.

Modular projects require upfront capital earlier in the project than in traditional construction because building elements are created in advance of site construction. More materials must be purchased up front when compared to traditional construction. Most manufacturers require a substantial deposit upfront.

The cost of modular construction may at times, for some projects, increase when compared to conventional construction. For example, a modularly designed project may require reengineering if preparations aren’t correctly made before manufacturing ensues. In these instances, rework may be necessary after production has begun. Additionally, based on site locations, increased road closures or restricted truck or crane access can stall projects. Transporting finished materials from the factory requires significant logistical planning.

What Does Falcon Do?


As a manufacturer of modified shipping containers, Falcon takes part in the larger modular construction industry. We modify individual boxes – prefinished rooms – to combine into larger container-based structures. As a company, we gladly use the benefits of modular construction to improve the processes and lives of our customers, making timelines more manageable, saving them money, and create quality structures. We’ve built an array of container-based projects, and we are eager to help make your company’s container structure a reality. Give us a call at 877-704-0177 or email us at to see if we’d make a good fit for your project.

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