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Responding to a HANSA request regarding the study of SeaIntel, a spokesperson of X-Press Feeders declared that »the report[ds_preview] is indeed very well researched, and highlights where third party feeders can truly give significant advantages on frequency to improve overall transit time, and vessel size to give the better slot cost. A common carriers main selling point is always their cost efficiency, but the bigger point behind this is that they offer a variable cost instead of a dedicated feeders fixed cost, and at a time when lines are all seeking to shed any fixed costs.«

Concerning the role of X-Press Feeders in a potential consolidation process, the spokesperson said, there would always be room for consolidation. But the fact that west of Suez there are perhaps only two to four true common carriers whereas in Asia there are more than 20 would allow more scope theree. »There is also room for operational cooperation amongst feeders, and in Asia this has been common for many years as a means to gain ship scale, improve frequency, and thus lower slot costs«, he said. Apart from last year›s acquisition of the small TAC gulf of Bothnia operations, buying other operators would not be X-Press Feeder’s »normal route to growth and we prefer to grow organically as the market permits«, the spokesperson added.

The strategy of the operator would rather be to expand where there is hub and spoke SOC feeder demand. »We believe that the SOC market itself might expand beyond that currently carried by common carriers, as Main Line Carriers outsource. MLOs, as seen in recent CMA CGM and other MLO decisions, may increasingly choose to take the opportunity to hand more of the enormous problem of feeder leg utilisation to independent operators, who can usually manage the flows more easily, it being all that they do, and what they do best. MLOs wish mostly now to focus on the optimum-retention cargo loaded on their mainhaul ships and can find that having feeder ships to fill causes them to contrarily carry low net-to-vessel cargo in a bid to maximise their feeder vessel utilisation«, he explained.

X-Press Feeders is very wary to operate its own containers for many reasons, »but chiefly because we do not wish to compete with our customers on any legs and thus create a conflict of purpose.« It would also be apparent that scale is equally necessary on the COC front and the niches are fast becoming very un-nichelike. »In the Intra-Asia market the regional carriers can control many millions of COC teus each and yet still feel they lack scale, whilst in the more specialised intra-Europe market we see even the larger carriers control annual COC volumes of only 0.5 to 0.9mill. TEU and yet need to be so frighteningly efficient if they are to successfully compete with trucks and roros«, the company thinks. It would be »devilishly« hard to be either an SOC or a COC operator in this market, but to combine both these business models with all the conflicts between them in terminals, transit time needs, frequency requirements and DOW calls could just mean that one would do neither very well. »Regional COC is not a market for the faint hearted, and the acquisitions between regional COC operators seen recently in Europe are likely to continue«, the spokesperson said.

At X-Press Feeders, the supply/demand-relation is seen as »woefully out of kilter and, with slowing GDP v teu-miles, combined with an overhang and cascade of big ships, this is depressingly unlikely to come back in to balance for a while yet.« The company owns about 25% of it’s operated, more than 100 ships. This ratio is aimed to be kept or mildly expanded as opportunities come up, »so we have a foot in both camps and empathise with our many friends in the tonnage-owning world, who have suffered inordinately in the past few years.« Nobody in the small ship sub-4000 category would have expected this oversupply really, »and although there were always some who clearly overbuilt, the majority have genuinely been caught out by the slow-down in growth and by the cascade caused by the phenomenol rush by the Main Line Carriers needing to chase ever larger ships to stay competitive on their mainhaul slot costs.«