Market Insight | Week 30

In a container shipping market dominated by headlines about large vessels and record-breaking orderbooks, the feeder segment often escapes the limelight. Yet, as the industry grapples with an influx of capacity in larger vessel classes, the feeder market stands out precisely because of its scarcity, stability, and quiet resilience. It is a segment that doesn’t follow the conventional narrative of chasing scale but instead builds its strength on fundamentals that many other sectors currently lack.
The contrast between feeders and the broader container market is striking. Across all containership sizes, the orderbook-to-fleet ratio sits at nearly 30%, with the 12,000–16,999 TEU class reaching an eye-watering 44%. This aggressive ordering spree, largely concentrated in the Neo-Panamax and ultra-large segments, is set to inject significant new capacity into the market over the next two years. In 2025 alone, the total container fleet is projected to grow by 6.7%, with Neo-Panamax vessels expanding by almost 17%. By 2026, this growth continues at 4%, still well above long-term demand trends. Against this backdrop of looming oversupply, the feeder orderbook looks almost conservative—just 4.93% of the fleet, close to its historical low. Newbuild activity remains balanced, with 2025 orders mirroring last year’s modest levels and a fraction of the heights reached during the post-pandemic boom years.
The aging profile of the feeder fleet further sets it apart. More than 28% of feeder vessels are already over 20 years old, and the average age now exceeds 15 years. With increasingly stringent environmental regulations and escalating operational costs, the segment faces a natural cycle of attrition, with more older vessels expected to head for demolition in the next 18–24 months. Rather than adding excess capacity, the feeder segment is likely to contract, with projections pointing to a 1.3% fleet decline by 2026—the steepest reduction since 2016. This structural tightening of supply is rare in a shipping landscape where most sectors are still building aggressively for the future.
Trade demand outlook adds another dimension to this story. Global TEU trade is projected to grow by 2.5% in 2025, with tonne-mile demand following close behind at 2.2%. In 2026, TEU growth is expected to rise slightly to 2.7%. While these are modest figures compared to the boom years, they are sufficient to support healthy utilization in a segment where fleet growth is negligible. Feeder ships, operating primarily on intra-regional routes, are well-positioned to capture this incremental growth. Unlike larger vessels, which depend heavily on deep-sea trades vulnerable to demand swings and freight rate volatility, feeders serve the stable, granular flows between regional ports and mainline hubs. In Asia, for instance, rising regionalization of supply chains and shifts in manufacturing patterns—such as the “China +1” strategy—continue to fuel intra-Asia volumes. Europe, with its dense web of secondary ports and the rise of nearshoring and the expansion of Mediterranean and Black Sea trade corridors, also leans heavily on feeder networks to sustain efficiency, a role larger vessels cannot replicate. The earnings landscape for feeder vessels also underscores their current strength and stability, with the timecharter rates moving steadily upward. In 2025, 1,000 TEU vessels have seen year-to-date gains of nearly 14%, while 1,700 TEU units have risen by over 21%. The longer-term picture is equally encouraging; the three-year charter rates for 1,700 TEU ships have climbed almost 25% since January, reflecting both the scarcity of available tonnage and the willingness of operators to secure capacity well into the future.
What makes the feeder market stand out is its ability to operate somewhat outside the gravitational pull of global megatrends. Compared to the heavily ordered larger vessel classes, feeders appear almost contrarian, operating under a different set of fundamentals. While mainline operators might contend with an influx of capacity, the feeder segment is shaped by disciplined ordering, natural fleet renewal, and a role in global trade that cannot easily be replaced. As a result, the feeder market’s fundamentals are drawing renewed interest, and this growing recognition is now translating into action, with more owners increasingly turning their attention to the sector. Lately, we have seen a gradual uptick in newbuildings a trend that further supports the argument that confidence in feeders is strengthening. This renewed interest in newbuildings, though still balanced compared to the ultra-large classes, reinforces the view that feeders are poised for a period of sustained strength and strategic importance, driven by both structural supply constraints and resilient regional demand.