TWO conflicting philosophies on the fate of feeders in today's market has been complicated by the prospect of new fuel rules in January and a Sino-American trade war.
Analysts have speculated that rates for larger containerships are rising because liner companies need to pull their vessels out of service to install scrubbers to comply with the IMO 2020 fuel rules.
The best candidate for a scrubber installation is a ship with room to spare onboard to fit the scrubber, and one that spends most of its time at sea.
But that's not a feeder with its limited space to add a scrubber. They also spend much less time at sea and more time in port than larger long-haul ships.
Yet some say that the future of feeder ships is bright, as long haul containerships become bigger and require smaller ones to both bring and take away cargo, says New York's FreightWaves
As global networks will move more towards a 'hub and spoke' model, there will be higher demand and lower vessel supply that will boost feeder charter rates, to the benefit of investors.
But there is a counter-argument. It holds that there are now so many large and mid-sized ships on the water that there will be more direct calls to ports, and ports will upgrade their terminal facilities to handle larger ships.
These direct calls will avert the more costly transshipment concept, and to the extent the hub-and-spoke system does expand, it will feature more transfers from very large ships to medium-sized ships, and not to small feeders.
Feeder specialist Euroseas, led by Greek shipowner Aristides Pittas, earns revenues by chartering its owned ships to vessel operators. It achieved an average daily charter rate of $9,088 per day in the first quarter of this year, up eight per cent year on year.
Euroseas owns 11 containerships with aggregate capacity of 25,483 TEU. Ten are in the feeder category - defined as box ships under 3,000 TEU in size (Euroseas' feeders range from 1,169 to 2,788 TEU). Its final ship is a 5,610 TEU panamax.
Mr Pittas maintained that Euroseas continues to seek acquisition opportunities. 'We are looking at the possibility of using the shares of the company as currency to buy further ships,' he said.
The trade talks will affect demand either positively or negatively, depending on the outcome. If demand holds, we do expect an improvement in charter rates, although not a dramatic one like the very significant improvements seen for the 5,000-8,000 TEU ships.'
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Analysts have speculated that rates for larger containerships are rising because liner companies need to pull their vessels out of service to install scrubbers to comply with the IMO 2020 fuel rules.
The best candidate for a scrubber installation is a ship with room to spare onboard to fit the scrubber, and one that spends most of its time at sea.
But that's not a feeder with its limited space to add a scrubber. They also spend much less time at sea and more time in port than larger long-haul ships.
Yet some say that the future of feeder ships is bright, as long haul containerships become bigger and require smaller ones to both bring and take away cargo, says New York's FreightWaves
As global networks will move more towards a 'hub and spoke' model, there will be higher demand and lower vessel supply that will boost feeder charter rates, to the benefit of investors.
But there is a counter-argument. It holds that there are now so many large and mid-sized ships on the water that there will be more direct calls to ports, and ports will upgrade their terminal facilities to handle larger ships.
These direct calls will avert the more costly transshipment concept, and to the extent the hub-and-spoke system does expand, it will feature more transfers from very large ships to medium-sized ships, and not to small feeders.
Feeder specialist Euroseas, led by Greek shipowner Aristides Pittas, earns revenues by chartering its owned ships to vessel operators. It achieved an average daily charter rate of $9,088 per day in the first quarter of this year, up eight per cent year on year.
Euroseas owns 11 containerships with aggregate capacity of 25,483 TEU. Ten are in the feeder category - defined as box ships under 3,000 TEU in size (Euroseas' feeders range from 1,169 to 2,788 TEU). Its final ship is a 5,610 TEU panamax.
Mr Pittas maintained that Euroseas continues to seek acquisition opportunities. 'We are looking at the possibility of using the shares of the company as currency to buy further ships,' he said.
The trade talks will affect demand either positively or negatively, depending on the outcome. If demand holds, we do expect an improvement in charter rates, although not a dramatic one like the very significant improvements seen for the 5,000-8,000 TEU ships.'
WORLD SHIPPING