Danaos sticks to mid-size container vessels while aiming to upgrade Capesize fleet

Speaking to Riviera, Danaos chief commercial officer Filippos G Prokopakis said the US-listed owner is pursuing a measured investment strategy. “While others are expanding rapidly through mass feeder contracting, we adopt a more prudent and balanced approach,” he noted.

Danaos has made clear it will not follow the recent surge in feeder container vessel orders, which have attracted unprecedented interest, particularly from Greek owners.

“Recognising that current shipbuilding and market prices do not reflect future returns, the company chooses to avoid overexposure to this particular segment,” Mr Prokopakis explained.

Instead, Danaos is concentrating on mid-size container ships in the 5,900–9,200-TEU range. “Maintaining a strong presence in this key size category will be fundamental for serving emerging markets in Asia, Africa, Oceania and Latin America,” he said.

These vessels, he added, are especially popular with both large charterers – who deploy them on secondary trade routes – and smaller operators, for whom they represent core assets in niche primary markets.

Cautious expansion into Capesize

At the same time, Danaos is steadily building its presence in the Capesize bulk carrier market, with a fleet of 10 vessels to date. “The aim is to create a resilient and diversified portfolio that can withstand freight market fluctuations,” Mr Prokopakis said.

Future investments will focus on renewing and upgrading fleet quality, with an emphasis on efficiency and compliance with environmental standards. Up to now, Danaos’ Capesize fleet has comprised of vessels built between 2009 and 2012.

“In the dry bulk market, timing is decisive for capitalising on positive momentum, and acquisitions must be made at values capable of delivering the highest possible returns to shareholders,” he added.

Market conditions

Shifting to market dynamics, Mr Prokopakis highlighted the positive momentum in the container vessel freight market, with rates remaining at healthy levels. Focusing on the supply-demand balance, he noted that while newbuilding deliveries are accelerating and older tonnage withdrawals are limited, demand remains strong, particularly from Asia and China.

He also emphasised that geopolitical tensions in key maritime passages, such as the Red Sea, along with climate-related impacts on the Panama Canal, continue to reinforce the need for alternative routes, providing a cushion for freight rates.

The US factor

Continuing on geopolitics, Mr Prokopakis also commented on the ongoing tariff uncertainty following Donald Trump’s return to the White House, noting its mixed effects on trade.

The reimposition of tariffs on China and other key partners has already increased costs and dampened certain imports. “Trade routes between Asia and the US are expected to be particularly affected, as tariffs make certain products less competitive. However, such policies often reorient trade, with companies seeking alternative suppliers or new markets,” he said.

This, he added, could create new routes and boost the role of secondary ports or trade hubs. “While tariffs exert pressure in the short term, in the medium term they can create new opportunities for cargo redistribution and diversification of trade flows,” Mr Prokopakis concluded.

Explaining newbuilding bonanza

Commenting on the recent wave of feeder vessel orders, Mr Prokopakis noted these ships have become a fundamental pillar of the supply chain, providing essential connections between large hubs and smaller ports. “The importance of regional trade, combined with the growing need for flexibility in logistics, creates stable long-term demand for this type of vessel,” he added.

At the same time, market participants have observed a resurgence of interest in ultra-large container ships (ULCSs). “This reflects growing confidence in major trade routes – such as Asia–Europe and Asia–America – as well as the need for higher efficiency and lower transport costs per TEU,” Mr Prokopakis explained. He also noted that, unlike in the past, ULCS orders are now accompanied by stricter environmental standards, technological innovations, and closer alignment with projected cargo flows.

Capesize outlook

On the dry bulk side, Mr Prokopakis acknowledged 2025 began with weak Capesize performance, citing reduced Chinese demand for iron ore and coal, steel production limits, and adverse Asian weather.

In recent months, however, demand has rebounded, driven by stronger imports of iron ore, coal and bauxite. “Despite ongoing uncertainty, the need for energy and raw materials continues to support large-scale transport,” he said.

Looking ahead, he expects the Capesize market to remain volatile but broadly positive, supported by strengthening Asian industrial indicators. “This sector continues to offer opportunities for those who can effectively manage volatility,” he concluded.