Market Insight

By Vasilis Fousekis, Research Analyst

Feeder containerships have emerged among the strongest segments of the container market in 2026, supported by expanding intra-Asian trade, disruption in the Middle East and persistent port congestion.

The 6-12 month time-charter rate for a 1,700 TEU geared feeder has risen to around $33,750/day, up by 19% y-o-y and more than double the 2023 level, while a 1,000 TEU unit now earns approximately $18,750/day, 10% higher than a year earlier. Charterers are fixing sub-3,000 TEU tonnage for delivery as far forward as the third quarter of 2027, with average fixture periods extending to around 24 months. The upside extends even to older tonnage: a 25-year-old 2,556 TEU feeder was recently fixed at $62,500/day for 12-14 months.

Behind this strength lies a restructuring of Asian trade flows. Chinese shipments sent directly to the US fell by 22% in the 12 months after the 2025 tariffs, while Chinese exporters redirected 52% of these volumes to other Asian countries. Product components are now assembled in Vietnam, Malaysia and Indonesia before onward shipment, adding port calls that favour smaller tonnage. Intra-Asian trade is projected to reach 72m TEU in 2026, up 5.4% y-o-y, while Shanghai-SE Asia spot rates averaged around $1,154/TEU in October, about two and a half times their 2025 average.

In the Middle East, the picture is more fragmented. Regional container trade is down 22% year-to-date and independent feeder operators have reduced their exposure to the region, while state-backed operators are filling part of the gap. UAE-based AD Ports’ Global Feeder Services has expanded in the Middle East & Indian Subcontinent and Iraq has revived a national shipping service in the Gulf for the first time in more than half a century, deploying a 900 TEU feeder between Jebel Ali and Umm Qasr. Although transits through Hormuz seemed to recover in September, conditions have since deteriorated, with attacks on containerships continuing.

Moreover, congestion at Asian containership terminals persists. Average containership waiting times at Chinese ports reached an estimated 23 hours in September, 45% above May levels, after a summer of typhoon closures, while Typhoon Champi threatened renewed restrictions around Ningbo and Shanghai in late October, just as congestion in East China had begun to ease. In a segment with little spare tonnage, each day of delay effectively removes capacity from the market, disrupting operators while supporting owners’ earnings.

As major liner operators gradually resume Red Sea transits, the shift is likely to weigh on the feeder market over time. More than half of Cape-diverted sailings have returned to the Suez route, although Gulf of Aden traffic remains at around a third of normal levels. The restoration of direct mainline calls at ports such as Jeddah could render some relay services established during the Cape diversion redundant, while released mid-sized tonnage may cascade into regional trades.

On the supply side, the feeder segment appears better positioned than larger sizes. Its orderbook stands at around 1.05m TEU across 635 vessels, equivalent to almost one fifth of the fleet, against more than 40% for the containership fleet overall. Delivery timing is less favourable, however, with 42% of feeder orderbook capacity scheduled for 2027 and a further 34% for 2028, mostly in the 1,000-1,999 TEU range. Demolition, meanwhile, remains negligible, even though 30% of feeder capacity is aged 20 years or more.

Looking ahead, strong intra-Asian demand and congestion should continue to support feeder earnings in the near term. However, accelerating deliveries in 2027, with feeder fleet growth projected at around 6%, together with Suez normalization, could gradually exert downward pressure on rates. The key question is whether the reshaping of Asian supply chains generates durable regional cargo demand or merely shifts volumes between routes. Ultimately, the outlook for feeders will hinge on whether intra-Asian growth can absorb the wave of tonnage arriving from 2027, with the level of geopolitical risk in the Middle East, remaining a key factor.

Tanker Chartering

The crude carrier market retreated overall last week, with the larger segments suffering losses while the Aframax segment proved more resilient. The BDTI averaged 7,294 last week, down by 7% on a weekly basis.

The VLCC market extended its correction, albeit still at historical highs. Limited cargo flows across most regions and growing vessel availability strengthened charterers' leverage, resulting in further freight declines. In West Africa, insufficient new business kept rates under pressure, while the US Gulf was similarly affected by sluggish enquiry and declining Brazilian fixing benchmarks. In Middle East, increased fixing activity around Fujairah after midweek, coupled with owners' growing reluctance to accept lower rates, improved sentiment. Nevertheless, any sustained recovery will depend on a pickup in cargo enquiry adequate to absorb the growing tonnage supply. VLCC TCE stood at $761,352/day, down by 14% w-o-w.

The Suezmax market came under pressure across most trading regions, as subdued cargo enquiry allowed tonnage lists to lengthen, weakening owners' bargaining position. Freight rates declined in West Africa, Atlantic and the Mediterranean, while limited demand East of Suez encouraged more owners to reposition vessels westwards. The Black Sea was a pocket of support, where steady cargo flows and tighter vessel supply sustained elevated rates. Despite the broader weakness, renewed fixing activity in the Atlantic basin, with more cargoes matching open vessels, suggested that freight rates may be finding a floor. The Suezmax TCE stood at $638,377/day, down by 9% on the week.

The Aframax freight market recorded a week of recovery, with regional divergent trends. Overall, Aframax TCE earnings rose by 2.3% w-o-w, reaching $336,059/day. The Mediterranean market was quite active, witnessing robust demand conditions and declining tonnage. Meanwhile, the North Sea improved as the week progressed, with fresh enquiries emerging and prompt vessel supply declining as owners ballasted towards other markets in search of higher returns. East of Suez, the market remained subdued amid tepid demand, leading to a buildup of open tonnage.

Dry Chartering

Overall, the dry bulk market delivered a mixed performance last week, with a recovery in the Capesize segment contrasting with declining Kamsarmax/Panamax rates and relatively stable conditions in the smaller segments. The BDI averaged 2,634, down 1.5% w-o-w.

Capesize rates rebounded last week, reversing the previous week's losses, with the Pacific leading the recovery as miners stepped up activity. The South Atlantic also strengthened, as growing chartering interest for later loading dates and limited vessel availability supported rates. Expectations of typhoon-related delays in China provided additional support to the Pacific. In contrast, the North Atlantic remained subdued amid lacklustre demand.

The Kamsarmax/Panamax segment faced weakening cargo demand, extending the downward trend in freight rates across both basins, particularly in the Atlantic. A growing surplus of open vessels intensified competition among owners, with East Coast South America facing the greatest pressure. The Pacific proved more resilient, supported by firmer Australian demand and steady Indonesian activity. Nevertheless, these favourable conditions were insufficient to offset the broader weakness in market fundamentals.

Turning to the smaller dry bulk segments, freight rates fluctuated within a narrow range last week, despite contrasting regional conditions. Ultramax/Supramax trading benefited from stronger Asian backhaul demand, offsetting softer North Pacific grain activity, while shorter tonnage lists supported Handysize rates in the Pacific. Both segments enjoyed firmer conditions in the South Atlantic, where healthy cargo demand and limited prompt vessel supply favoured owners. Conversely, subdued US Gulf demand left excess tonnage competing for employment, keeping rates under pressure, while the Continent and Mediterranean saw little change.