The Dolly Blues – the current holders of the competition – were beaten 2-1 by higher-league opposition in the shape of National League North outfit Southport at the County Ground, Leyland, on Wednesday night.
However, for much of the encounter, City were the better team and Fell admits his men can count themselves unfortunate that they are not in the final.
A brilliant long-range effort from Sam Bailey had given City the lead in the first half but the loss of key defender Niall Cowperthwaite through injury had a massive effect on Fell’s men. Already down to the bare bones in terms of their squad, Port were able to take advantage as they turned the tie around.
“We were comfortable and cruising to be honest,” said Fell. “For 55 minutes, we were the better side.
"But then Cowps got injured with a really bad hamstring problem. We didn’t really have anybody to replace him with.
"On the bench, we had a couple of young kids and Enock Likoy. That was it.
"So you take away like Cowps who can play centre-midfield or centre-half and he’s a big miss. Him and Simon Wills were the best players on the pitch but when he went off, we lost our way.”
Fell is hopeful that his men can replicate their performance against Port this weekend – and if they do, then they should have enough to account for NPL Premier Division strugglers Hyde United at Giant Axe.
Fell said: "Southport had a very strong team out and their manager Liam Watson said 10 of that 11 will be playing against Chorley this weekend.
"But that’s the challenge, can we replicate that performance because if we play like that more often then we will be doing a lot better this season.
"Hyde will be fighting for their lives so I would expect them to be hard working. They have got quality up front in Tom Pratt and Liam Tongue and plus they have Ed Ikpakwu who was with us earlier in the season.”
In the NPL West Division, Clitheroe travel to Runcorn Linnets, while Kendal host Mossley.