Shippers Leasing Entire Ships To Ensure Delivery

Posted by Land Link Traffic Systems on Mar 16, 2022 7:42:37 AM

Super shippers are renting entire cargo vessels @ $200,000 per day to ensure seasonal deliveries.  Euroseas (NASDAQ: ESEA) confirmed this week that it chartered its 2009-built, 4,250-twenty-foot equivalent unit container ship Synergy Oakland for 60-85 days at a gross rate of $195,000-$202,000 per day starting in the second half of October.

“This is the highest time-charter rate ever achieved by any vessel in our fleet and one of the highest rates ever achieved in our industry,” said Euroseas CEO Aristides Pittas. This is alarming. It’s unclear whether brokers and freight forwarders are trying to consolidate shipments or super shippers like Walmart, Target and Home Depot are renting these ships exclusively. It doesn’t matter really. Whether the conveyance travels on land, air or sea equipment is scarce.

Desperation at this level will guarantee everything on that vessel will cost more. Major retailers with deep pockets are putting their sizeable financial resources to use to avoid a holiday season supply chain disaster but it comes at a cost. Add the inflation variant and we are surely looking at eye popping price increases.

Russia Looking To China For Help

Russia has formally requested military assistance from China in Ukraine. The decision of Chinas president Xi Jinping will have major consequences on international trade. U.S. National Security Adviser Jake Sullivan, who is due to meet with China's top diplomat Yang Jiechi in Rome this week, warned Beijing it would "absolutely" face consequences if it helped Moscow evade sweeping sanctions over the war in Ukraine. Sullivan plans in his meeting with Yang to make Washington's concerns clear while mapping out the consequences and growing isolation China would face globally if it increased its support of Russia. Sanctioning China would be tricky. China may be uniquely positioned to act as a neutral mediator between a Western-supported Ukraine and Russia to end the war. As disagreeable as some in the West may find the idea, it could be time to offer the Russian leader a face-saving off-ramp with China’s help.

What May Be The Consequences On Trade If China Helps Russia In Ukraine Or To Evade Sanctions

China wants to avoid being impacted by U.S. sanctions over Russia’s war, Foreign Minister Wang Yi said, in one of Beijing’s most explicit statements yet on American penalties that are contributing to a historic market selloff. Concerns are growing among investors that Chinese companies will face U.S. sanctions after American officials said Russia requested military and financial assistance from Beijing. An index of Chinese shares in Hong Kong has plunged 21% in the world’s worst performance among actively traded benchmarks since the invasion, falling to the lowest level since 2008. U.S.-listed Chinese stocks fell a record 12% on Monday, after losing 10% for two consecutive days, on concern American investors will no longer be able to trade them on U.S. exchanges.

What Effect Will China Sanctions Have On The U.S. Economy

Given our dependence on China imports can we really afford to impose any more sanctions? Our domestic manufacturing capabilities may not be capable of supporting any trade sanctions-and what would be the cost? We have been reliant, to our own peril, on cheap Chinese manufacturing for decades.  Chinese export sanctions would not likely affect export volumes but would likely make them more expensive.  And, of cousre, cost increases flow downhill to the end user.

US economic sanctions have hindered technology transfer to China and US investment in China. US restrictions on imports from China have caused deadweight losses for the US due to higher domestic production costs for import substitutes and a reduction in consumption. US export controls have hindered US exports to China and contributed to large US trade deficits with China. The export controls have also caused losses of highpaid jobs in the United States and benefited competitors from other countries. In addition, US economic sanctions against China have had significant thirdparty effects. China's diversification of imports to sources other than the United States may have a longterm effect on US exports to China even after US economic sanctions against China are lifted.

These are conditions which should cause unprecedented concerns about the United States supply chain. Now more than ever is the time to seek all the expert Logistics planning assistance available. Visit us @ today.

Stay Safe Everyone.

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Michael Gaughan
Technology Officer
Land Link Traffic Systems


Topics: Supply Chain Management, Third Party Logistics, Freight Bill Auditing, Intermodal Freight, Transportation News, Reducing Freight Rates, Maximizing Routing Efficiencies, Shipping News, Logistics News, Industry Trends, Technology, dimensional pricing