by Lloyd's List
WHILE orders for sub-5,000 teu containership newbuildings have surged since the second quarter, significantly greater investment is needed to replace the ageing feeder fleet and meet demand for larger tonnage in intra-regional trades.
“The feeder segments are heavily underrepresented in the newbuilding orderbook, which we believe will lead to a supply-side crunch in the future,” Moritz Fuhrmann, co-chief executive and chief financial officer at boxship tonnage provider MPC Container Ships, told delegates at London International Shipping Week’s Sustainable Container Shipping Forum, hosted by Lloyd’s Register.
“Regulatory pressure will soon drive older feeder vessels out of the market — there is a growing share of tonnage aged 20 years or more,” Fuhrmann said. He argued that older post-panamax tonnage, up to 8,000 teu and serving medium-haul trades, would also require replacement.
Despite the rise in orders for smaller containerships this year, the newbuilding orderbook for vessels below 5,000 teu represents just 6.5% of the existing fleet by vessel numbers, compared to 34% for vessels of 5,000 teu and above.
Meanwhile, limited capacity to build smaller containerships may constrain further order growth. With most shipyards having full orderbooks, shipowners may face limited choices for newbuilding contracts.
Consequently, most recent orders for smaller boxships have been placed with second-tier private shipbuilders, primarily in China.
“Japan is less interested in orders from foreign shipowners, and there are significant price differences between China and South Korea, naturally leading us to China,” Fuhrmann added.
MPCC has developed a close relationship with the private Chinese shipbuilder Taizhou Sanfu. After the successful delivery of two 1,279 teu methanol dual-fuel ships this year, ordered in 2022 and backed by 15-year charters, the company returned to the same builder in July to order four dual-fuel ready 4,500 teu newbuildings.
With options for two additional ships, all four are reportedly supported by time charters to a leading intra-Asia container line operator.
Fuhrmann highlighted that smaller shipyards offer more flexibility in building containerships to an owner’s preferred specifications, rather than relying on standard designs that may not suit certain feeder trades.
“When big shipyards are busy, they tend to be less flexible on specifications, but private second-tier yards offer much greater flexibility,” he said.
Chinese state-owned shipyards typically build only designs provided by the government-owned Shanghai Merchant Ship Design and Research Institute, which are not always suitable for MPCC’s charterers.
This flexibility in ship design is especially important for smaller containerships, which often need to be optimized for regional trading with varying requirements.
Fridtjof Rohde, director of sales at Hamburg-based ship designer Technolog, noted that smaller boxships operating in northern Europe and Baltic trades require a wider range of fuel types. They may also need to accommodate more 45 ft or “pallet-wide” containers, along with a higher number of refrigerated containers compared to other trades.
Rohde told delegates at the Lloyd’s Register forum that operators of feeder containerships serving intra-Asia trades have limited interest in alternative fuels. Their priorities lean more towards vessel hull dimensions due to draft restrictions at key ports such as Bangkok, Thailand, and Kolkata, India.
“Outside Europe, requirements are very different. In Asia, there is a strong focus on high-cube containers, but no demand for pallet-wide boxes. In Europe, there is growing interest in options like carbon capture for new tonnage,” Rohde said.
Shivendu Gadkar, head of sustainability at third-party feeder container line X-Press Feeders, observed that new feeder containership designs should be developed to accommodate growing box volumes to and from developing regions.
“Trade lane growth in Africa and Latin America means newbuildings will require more niche designs,” Gadkar said.
Vessels serving these trades generally have lower speed demands, but need to cover longer voyages. Demand remains strong for geared vessels, which can load and discharge with their own cranes, especially in the southern hemisphere, though few newbuildings are currently being specified with cranes.
With newbuilding investment until recently focused on very large ships, particularly those capable of loading more than 16,000 teu, the structural shortage of feeder and regional boxships is unlikely to be resolved by cascading older, larger vessels from mainline trades, as it had been in the past.
Braemar container market analyst Jonathan Roach told Lloyd’s List: “Surplus traditional panamax tonnage may provide some stopgap relief, but their inefficiency and unsuitability for feeder services make them a poor long-term solution.
“Ultimately, the situation highlights the urgent need for renewed investment in a variety of modern, efficient vessels able to load up to 3,000 teu.”
