Shortsea operators suffer as new ocean alliances put feeders out of work

Hub-and-spoke feeder calls have fallen “drastically” following this year’s deep sea container carrier alliance reshuffle. According to X-Press Feeders’ chief executive, Tristan Howitt, ocean freight rates and volumes have shot up in 2017, but not the same for the shortsea hub-and-spoke feeder sector.

There was a marked increase in direct calls to traditional ports, for example, Jakarta on transpacific and European services, Thailand to Europe, Vietnam and North China, where previously, lines would feeder these volumes via transhipment hub ports like Singapore, Port Klang, Kaohsiung and Busan.

But there was increased feeder demand at secondary ports such as PAT Bangkok Terminal and Cat Lai in Ho Chi Minh City.

While many carriers are getting larger through M&A, and on certain feeder trade lanes definitely have the scale to run in-house services, there are still many important factors favouring the use of common feeder services. Service frequencies, variable costs versus fixed costs and feeder operating capabilities are three.
(The Loadstar)