Unlike the colossal supertankers and 400-metre container giants that sail between the world’s largest ports, feeder vessels rarely attract much media attention. However, without these small, vital carriers to link it all together, global shipping would soon come to a complete standstill.
Out of a total of the approximately 52,000 vessels that currently make up the world merchant fleet, just over 3,000 are feeder vessels. Together, these ships – which represent just over 5% of the global fleet – provide the crucial link between the giant “mother” vessels and container hubs and most small- and medium-sized ports.
Feeders collect shipping containers from the world’s largest container terminals, from where they “feed” all the smaller ports dotted around the globe. Whereas the world’s largest container vessels can carry between 14,000 and 19,000 twenty-foot equivalent units (TEU), feeder vessels are defined as seagoing vessels with capacities ranging from 100 to 3,999 TEU. In addition to shipping freight to and from giant ports such as Rotterdam and Bremerhaven, feeders also carry containers between smaller ports, such as those on the North-West European seaboard and around the Baltic Sea.
Jacob Høgh Thygesen, Director Merchant Solutions, Wärtsilä Ship Design, describes feeder vessels as the crucial “small pieces in the massive global puzzle”.
“Today, 90% of all merchandised transport takes place by sea,” he says. “We see huge potential in the merchant segment, which is the backbone of all seaborne trade. There are more units on the water and, given the fast-changing regulatory environment, we expect to see a growing need for new ships in the coming years.”
Environmental legislation is the key factor currently impacting the marine segment. While ships were traditionally powered by Heavy Fuel Oil (HFO), which produces high levels of harmful pollutants, including sulphur dioxide (SOx), international law now states that shipping fuel can contain no more than 3.5% sulphur. Further, the limit in Emission Control Areas (ECAs) or Sulphur Emission Control Areas (SECAs), which currently include coastal areas such as the Baltic Sea, North Sea and the waters surrounding North America and the Caribbean, is 0.1%.
LNG is the future
LNG is one of the only fuel sources able to comply with these strict limits and, with the majority of feeder vessels operating in coastal areas, Thygesen says the need for LNG-compliant solutions is set to become a must for operators in the very near future.
“LNG vessels are coming; there’s no way around it,” he says. “I’m convinced that vessel owners who miss this boat – so to speak – will ultimately be bypassed in the market. I think that’s a given at this point.”
“Feeders are the ships going into the Baltic Sea, as well as travelling along the northern and western coasts of Europe, into the coastal waters of the United States and in the Intra-Asian trade lanes. The feeder fleet is the obvious candidate to lead the way to a dual-fuel future.”
Four new vessel designs
Wärtsilä launched four new container feeder vessel designs at this year’s Nor-Shipping exhibition. Their innovative designs seek to achieve optimal fuel efficiency, as well as compliancy with current and future environmental regulations.
“Fuel flexibility is key to our latest designs, along with fuel efficiency, optimised cargo capacity and the lowest possible emission levels,” says Thygesen.
All four new vessel designs are available in three versions: the “conventional” version runs on HFO, while the “environmental” version also uses HFO but is fitted with scrubbers. Finally, the “clean” version is a fully LNG-compliant, dual-fuel vessel.
According to Clarksons’ latest Shipbuilding Forecast Club, there is every reason to believe that the global fleet will continue to grow in the coming years, with a 4% year-on-year capacity increase predicted between 2022 and 2026. However, the question remains as to what kinds of ships owners will decide to invest in.
Thygesen believes that compliance and profitability are the top two concerns for most vessel operators looking to invest in new ships these days.
“The first question is when to make the transition to the new designs. Many operators can still get away with using conventional designs but, as governments and authorities continue to push the regulatory agenda, they will have to consider a design change relatively soon,” he says, adding that this issue is even more pressing for operators looking at the long-term residual value of their vessels.
New business models
“Ten years from now, when we expect that the majority of vessels will run on LNG, conventional vessels will have very limited trading options. This supports the CapEx argument – while you may have to pay a little more for your LNG-compliant solutions in the short term, there will be significantly more value to be gained from it down the line,” explains Thygesen.
Once the decision has been made to invest in a dual-fuel vessel, the next question is how to configure it to optimise utilisation and profitability.
“Gas is carried in tanks and the tanks need to be installed somewhere – typically in a place where the operator would prefer to carry containers,” says Thygesen.
Owners now have to factor a number of new considerations into their business models: how big should the tanks be and how many of them are needed? Where should they be placed to ensure optimum cargo efficiency and good stability? According to Thygesen, these are questions that Wärtsilä can help to answer, taking into account factors such as the operating profile of the vessel, where will it be sailing and the availability of fuel in that region.
“Our designers have developed solutions for minimising cargo loss,” he says. “Many different operational considerations need to be taken into account when designing a merchant vessel and we always strive to reach the optimal balance between the owners’ commercial and operational requirements.”
Availability of LNG
Meanwhile, one major obstacle remains before the transition to LNG can become a reality: today’s infrastructure is simply not strong enough to supply the amount of LNG that is needed to fuel all the world’s ships. There are roughly 8,000 ports worldwide, but only 15 of these supply LNG bunkering at the present time. Although a further 30 ports are interested in providing LNG, this is still insufficient.
However, change is in the air. In March 2015, Wärtsilä launched a small family of LNG carriers and LNG bunker carriers and other actors are making similar moves to extend the availability of LNG. Meanwhile, several governments are starting to look at incentives to improve the LNG infrastructure.
“By 2030, China is expected to own up to a quarter of the world’s commercial shipping fleet, thus increasing its carrying capacity from nine billion tonnes to 20-25 billion tonnes. China already has commercial LNG bunkering stations at the ports of Zhoushan and Nanjing, and the number of stations is just going to increase,” says Thygesen.
Another country supporting the LNG infrastructure development is Canada, which is pursuing a strongly pro-LNG stance on the St. Lawrence River and the Great Lakes.
“LNG bunkering is no longer ‘nice to have’; it’s an imperative,” says Thygesen. “If the ECAs and SECAs won’t allow ships to operate on traditional fuel, the ships will have to change. When the ships change, they will need fuel. And that fuel has to be delivered, which will, in turn, stimulate the economies of the countries that provide it.”