By J. Yates
Like John D. Rockefeller with Standard Oil, China is moving to dominate the shipping industry with profound implications for companies, no matter their business line, such as Dry Ships Inc (NASDAQ: DRYS), DHT Holdings (NYSE: DHT), Frontline Ltd (NYSE: FRO), TRMD (NASDAQ: TRMD) and Eagle Bulk Shipping (NASDAQ: EGLE).
At China's last national congress for the Communist Party in 2007, it was decreed that 75 percent of the seaborne import and export trade to the country be carried on Chinese-controlled ships. China is now using its pricing power as the world biggest manufacturer to accomplish this goal. China's Cosco has recently "reneged unilaterally on payments on many of its highest-priced contracts to charter ships..." At the peak of its economic boom in 2008, Cosco signed contracts for charter ships at $80,000 a day. Due to The Great Recession, rates have hit as low as $10,000 a day for the short term spot market.
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--This is bound to effect us in the heavy haul / Specialized hauling industry if trade volumes from China Drop but considering whats happened in the past few years, why worry about?
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