News / SITC boosts order for more feeder vessels as tonnage becomes scarce

Intra-Asia carrier SITC has ordered six 1,800 teu feeder vessels from Huanghai Shipbuilding in China.

The $174m order came shortly after chairman Yang Xianxiang told shareholders there were few feeder ships available, and Hong Kong-based SITC, which already owns more than 100 ships, wanted to cement its status as one of the largest intra-Asia carriers.

In a Hong Kong Stock Exchange filing yesterday, SITC disclosed that an order for four vessels was made in June and this month it was exercising options for two more. The carrier commissioned six similar newbuildings at Huanghai in 2022.

SITC growing owned tonnage mirrors a trend among feeder operators: last week, Alphaliner reported that Singapore’s X-Press Feeders had expanded its fleet by nearly 22% in the past 12 months, adding 35,000 teu; and DP World-owned Unifeeder has boosted its capacity by 18%, or 23,000 teu.

The overall increase in the global feeder vessel fleet has outpaced that of the global liner fleet in the past year, which grew 10.9%.

This year, SITC has taken delivery of nine 1,000-1,800 teu ships from Huanghai and Dae Sun in South Korea, and is now the 14^th-largest liner operator, with  a capacity of 182,429 teu, comprising 104 owned ships and 13 chartered vessels.

Mr Yang said: “To be honest, ten years ago we did not expect to have more than 100 ships in Asia. We’re ordering more, as there are relatively few orders for containerships below 3,000 teu.”

He also addressed concerns that liner operators’ current newbuilding orders could cause a tonnage overhang once the Houthis stop their attacks in the Red Sea.

Mr Yang said: “The Red Sea crisis is currently the biggest factor affecting the container shipping market. If ship operators stop the detours [round the Cape], there will definitely be overcapacity, making it cheaper to charter ships. This could affect our ship-owning and chartering plans, and the proportion of our chartered tonnage could change.

“If there are future opportunities, we may open up new markets through large-scale ship leasing. On the contrary, if charter rates remain at their current high level, we’d hold off on chartering. We’re cautiously optimistic about the next three years, but SITC still has great development opportunities.”

In H1 24, SITC saw revenue of approximately $1.3bn, a year-on-year increase of 3.8% on the same period in 2023, while net profit was up nearly 13%, to $350m.