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Small container vessels hit hard by German KG collapse

Following the collapse of the German financing system with private investors in the tax-favored KG funds, where the capital for renewing the real workhorses will come from remains an open question, writes Drewry.

The renewal of the small container vessels of less than 3,000 teu, the real workhorses in the inter-regional traffic, is headed toward serious problems due to the veritable collapse of the German financing system, with the many struggling KG funds.

Just four percent of the existing fleet of ships below 3,000 teu have been ordered at the shipyards, and though these ships belong to the small segment of the container industry, they are the ones carrying the biggest load regionally. The ships make up 25 percent of the capacity in the global container fleet, while their share of the freight is much greater due to short transit time of the ships and the services they belong to. That's why the lack of financing for these ships is worrying, writes Drewry in its Container Insight Weekly.

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