Globally, investments in container feeder vessel shipping have been suffering global losses for more than twelve years, since mid-2008. In October 2020 in a brief period the market segment made a radical turnaround. Charter rates rose and container feeder vessels in all segments started making a profit again. The increase is structural. After all, as in the past twelve years more tonnage was scrapped than new vessels were built, the available capacity fell sharply, while demand continued to rise. This resulted in substantial rate increases, making investments in container feeder vessels a realistic and interesting option again. This development clearly shows how crucial shipping is, even, or perhaps especially in a time in which ‘normal life’ has been halted. Seaborn cargo transport accounts for more than 90% of worldwide goods transport.

Rising demand for future proof sustainable feeder vessels

The outbreak of the coronavirus (COVID-19) pandemic at the beginning of 2020 was subject to much uncertainty, among other things on world trade and the global economy. The lock down in China caused the worldwide production and distribution chain to flounder. However, we also saw the goods flows rapidly pick up again once China appeared to have the outbreak under control within its own territory. In the second half of 2020 demand for container capacity increased again, and from October 2020 on, charter rates for container feeder vessels started to rise again. By the end of 2020 newly fixed charter contracts rates were already 20% above average in 2019. This signified a trend.

Substantial rate increases

The trend of rate increases in all container shipping segments continued. At the end of 2020 it was possible to establish structural and substantial recovery, and by the beginning of 2021, on concluding various new contracts, this trend strengthened.

Development of charter rates for 750 TEU container feeder vessels in € per day

Source: Confeeder Shipping & Chartering, September 2021