Driven by the structural transformation of global supply chains over the past year, the market demand for feeder containerships is experiencing significant growth.
In its latest weekly report, shipbroker Intermodal noted that the global container shipping market had a relatively subdued start to 2026. As the Chinese Lunar New Year approaches on February 17, market activity has declined as expected. While the pre-holiday "rushed shipping" effect in December temporarily boosted demand, market momentum has now gradually cooled.
Combined Impact of the "Chinese New Year Effect" and Geopolitical Dynamics
Nikos Tagoulis, Senior Analyst at Intermodal, noted that the Chinese New Year effect is a significant seasonal factor suppressing short-term tonnage demand. Factories typically begin scaling down production two weeks before the holiday, leading to a decline in labor supply, with disruptions to supply chains often lasting three to five weeks. However, compared to short-term seasonal fluctuations, geopolitical dynamics play a more critical role in shaping long-term industry trends. Among these, the timeline for the restoration of navigation through the Suez Canal has emerged as the most significant source of market uncertainty.
Currently, liner operators have adopted a divergent strategy: some are cautiously resuming Red Sea routes, while others continue to opt for detours via the Cape of Good Hope. Notably, a "hybrid approach" has emerged in the market, where low-value cargo is routed through the Suez Canal, while high-value cargo is diverted to safer alternative routes.
Overall, avoiding the Red Sea remains the predominant choice. According to BIMCO data, Red Sea traffic volume in early January plummeted by 60% compared to three years ago. Despite signs of stabilization in the security situation, most shipowners are still adopting a "wait-and-see" approach due to the persistent threats posed by the Houthi forces.
Tagoulis particularly highlighted a paradox facing the market: while resuming navigation through the Suez Canal would offer multiple operational benefits, such as shorter voyage times, reduced fuel consumption, and lower carbon emissions, from a supply and demand perspective, a significant increase in canal traffic would shrink "ton-mile" demand and release capacity currently tied up by detours. This would, in turn, exert downward pressure on freight rates from the supply side.
The Rise of the "Hub-and-Spoke" Model Amid Trade Fragmentation
Analysis points out that escalating geopolitical risks, coupled with increasing trade frictions and protectionism, have triggered structural changes in the container shipping market. As trade patterns are reshaped, regional trade routes are gradually gaining prominence.
Specifically, the flow of China's exports is increasingly shifting from the United States toward European and ASEAN markets, while container volumes within Asia are also strengthening. The rise of regional trade has driven the widespread adoption of the "hub-and-spoke" operational model—where cargo is consolidated at strategic central ports before being distributed to surrounding ports via feeder services.
This model offers clear advantages in improving schedule reliability, increasing load factors, and reducing transit times. Currently, the Gemini Alliance has already adopted this operational model, and Premier Alliance has also announced that it will restructure its service network into a similar hub-and-spoke system starting in April.
Aging Fleet and New Demand Drive Surge in Feeder Ship Orders
The shift in trade patterns, combined with the aging structure of the existing fleet, has significantly boosted the feeder container ship segment.
According to the Intermodal report, in addition to rising demand, fleet renewal is also a key driver. The current average age of the feeder fleet is 15.5 years (compared to just 13 years two decades ago), with as much as 33% of capacity being operated by vessels over 20 years old. This situation has triggered a surge in newbuilding activity in 2025: a total of 206 feeder ship orders were placed for the year, significantly higher than the 118 orders in 2024. The share of the order book relative to the existing fleet surged year-on-year from 4.9% to 9.6%.
Looking ahead to 2026, Intermodal maintains a cautious outlook for the market. The container fleet is set to continue expanding, but after a high growth rate of 7% in 2025, the pace is expected to slow to 5% in 2026. The ship demolition market remained quiet in 2025, with only 11 vessels (mostly small feeder ships) scrapped, well below historical levels. On the demand side, trade volume (in TEU) is projected to grow by 2.5% in 2026, down from 4% in 2025. Due to the shift toward shorter-haul trades, ton-mile demand is expected to contract slightly by 0.6% in 2026.
The report concludes that, based on the above data, the container shipping market faces clear downward pressure on freight rates in 2026. In this supply-driven market, developments in Suez Canal transit activity will be the decisive factor—any gradual recovery in transit volumes could further weigh on freight rates.
