Last November, when Clarksons Research delivered a report on the container ship market, it was noted that container ship orders and replacements were dominated by large vessels, while feeder-type container ships generally had an older average age.
Since the beginning of 2024, the overall newbuilding market has shown a relatively moderate trend, but the demand for newbuilds of “feeder-type” container ships continues to heat up.
The “Feeder-Type” Container Ship Market
According to Clarksons Research’s container ship fleet statistics, ships below 3,000 TEU currently account for 57% of the global container ship fleet by number, expanding to 69% for ships below 5,000 TEU. With the growth in cargo volumes, the specifications of “feeder-type” container ships are also gradually increasing in size. Although traditional sub-3,000 TEU ships remain active, ships above 3,000 TEU and even above 4,000 TEU are becoming increasingly popular.
“Feeder-type” container ships play a key role in liner services. Clarksons Research’s container ship route data statistics show that these ships are active on over 1,400 liner routes, involving more than 650 operators, including large global liner companies and numerous regional liner operators.
“Feeder-type” container ships perform a dual function. Clarksons Research’s container ship trade data statistics indicate that these ships carry intra-regional cargo, accounting for approximately 40% of global container trade. Asia and Europe are the most active regions for “feeder-type” ship operations, with Clarksons statistics showing a 5.7% year-on-year increase in intra-Asia trade so far this year. Furthermore, they transfer cargo from mainline services to feeder services, or vice versa, within “hub-and-spoke networks.”
In contrast to falling container freight rates per box, container ship charter rates have performed remarkably well under the influence of factors such as liner alliance restructuring and geopolitics. Clarksons Research’s container ship charter rate statistics show that the one-year time charter rate for a 2,750 TEU vessel has reached $39,000 per day. Excluding the abnormal highs during the pandemic, this level is currently at a historical high.
Heating Up of “Feeder-Type” Orders
According to Clarksons Research’s newbuilding order statistics for container ships, since the beginning of the year, orders for “feeder and large feeder-type” container ships below 5,000 TEU have reached 193 vessels, accounting for more than half of all container ship orders year-to-date. If Letters of Intent (LOIs), option orders, and unconfirmed orders are included, the orderbook for “large feeder-type” ships below 5,000 TEU would reach the second-highest level since the financial crisis. Currently, it appears that more orders for “large feeder-type” ships will follow.
On the shipowner side, against the backdrop of a hot newbuilding market, regional liner operators have begun placing orders. Influenced by manufacturing relocation, trade wars, etc., intra-regional trade and other non-mainline trades have increased significantly. Regional liner companies are adding intra-regional route deployments and gradually expanding their operational scope, placing orders and upgrading their vessel types. On the other hand, independent shipowners are re-entering the newbuilding market, with orders being primarily “speculative.” Under the background of green transition and fuel switching, large liner companies are unlikely to directly order traditional fuel “feeder-type” ships, which also provides opportunities for independent owners. Although charter support from liner companies is limited, causing some LOIs to fail to progress, there have also been new orders driven by liner companies’ fleet renewal plans. Clarksons Research data shows that there are currently 123 owners with orders for “feeder and large feeder-type” container ships below 5,000 TEU, 85 of which are liner operators. By TEU, approximately 44% of the orders are from Chinese owners.
On the shipyard side, as leading shipbuilders have sufficient orderbooks, coupled with the fact that some top yards do not build small and medium-sized container ships, a greater share of the container ship orders year-to-date has shifted to small and medium-sized yards. Clarksons Research data shows that 8 shipyards have received orders for “feeder and large feeder-type” container ships for the first time, 6 of which are Chinese yards. Another 7 Chinese shipyards have received such orders again after a hiatus of three to four years.
