Mandarin cautiously welcomes SeaIntel’s feeder forecast

Container shipping analyst SeaIntel has predicted a boost to the feeder ship sector based upon the current imbalance of ultra-large container vessels entering service against the volume of feeder ships capable of servicing them.

SeaIntel estimates the global fleet has 7.9 feeder vessels for each large vessel in operation. But the current orderbook and anticipated scrapping suggests a decline to a ratio of 5.4 by 2020.

SeaIntel noted in its report: “It appears that whereas the market over time will indeed be able to absorb the new generation of large tonnage, the current orderbook appears far too small as it pertains to feeder tonnage. At the outer extremes of the estimates, the global fleet will see a shortage of 400-1,200 feeder vessels by the end of 2020. Realistically, a “shortage” of 1,200 vessels is not likely – such a massive shortage will increase TC rates to such elevated levels that scrapping will cease and cause the usage of vessels much too large for the job.

Commenting on the data, SeaIntel chief executive, Alan Murphy said: “It is clear that in the absence of any additional feeder vessel ordering, we will very likely see an increase in the premium for feeder tonnage – and this in turn will place further pressure on the pricing strategies for the carriers, where we will see the pricing spread between direct port-port pairs and transhipment products widen.”

Hong Kong-based Mandarin Shipping is a growing provider of feeder tonnage. The company’s chief executive, Tim Huxley commented:

“This is positive news provided it doesn’t prompt a rush to the shipyards !

“The scenario the report sets out makes quite a few assumptions and our strategy is based on continued growth in intra-Asian trade which has seen much stronger demand for the efficient design of ship Mandarin has, with all five of our ships now employed in the region and playing a core role in the Belt & Road.

“Steady, properly considered growth is something we want to achieve and we maintain a dialogue with potential customers to ensure we are providing the shipping services they need,” he added.

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