The US Department of Justice has indicted a Chinese box manufacturer; executives have already been arrested.
The US Department of Justice has formally indicted four of the world's largest container manufacturers.
The DOJ has officially moved the issue of soaring container prices during the pandemic into a criminal investigation.
On May 19, local time, the US Department of Justice (DOJ) announced criminal charges against four of the world's largest standard dry container manufacturers and seven executives.
"Between 2019 and 2024, they manipulated the global standard dry container market by restricting production capacity and colluding to raise prices."
The four companies named are:
China International Marine Containers (Group) Co., Ltd.
Singamas Container Holdings Ltd.
CXIC Group Containers Co., Ltd.
Shanghai Universal Logistics Equipment Co., Ltd.
The seven executives indicted include the chairmen, CEOs, and marketing directors of these companies.
The US Department of Justice stated that these four companies collectively control approximately 95% of the global standard dry container production capacity.
The unilateral accusations also include:
1. Compressing supply by reducing production shifts and limiting factory operating hours;
2. Mutually agreeing not to increase production capacity;
3. Colluding to suppress competitors;
4. Installing cameras on nearly 50 production lines to monitor each other for overproduction.
The DOJ's Consequences
The DOJ believes this behavior led to:
Container prices doubling between 2019 and 2021;
Manufacturers' profits surging approximately 100-fold during the pandemic;
American consumers bearing the brunt of higher costs and longer supply chain delays.
A senior DOJ official also emphasized that this case is to seek "justice for ordinary Americans" who suffered from rising prices during the pandemic.
Ongoing Investigations After the Pandemic in the US
During the pandemic, the US supply chain failed, and the US has been searching for the "cause."
In April 2020, the FMC launched "Fact Finding 29." The investigation covered shipping companies, ports, terminals, railroads, trucks, and container yards.
The investigation covered port congestion, empty container relocation, D&D fees, reasons why US exports were refused loading, and whether shipping alliances exceeded their scope of cooperation.
1. US agricultural exporters strongly complained that shipping companies preferred to take empty containers back to Asia rather than wait for US exports, citing higher profits on return trips from Asia.
Subsequently, the US Congress directly pushed for reforms to relevant shipping laws.
2. The US believed there was a severe disconnect between the information systems of terminals, shipping companies, railroads, and trucking companies.
The FMC later specifically promoted the Maritime Transportation Data Initiative (MTDI) to investigate the entire container flow data chain.
3. Investigations into chassis, booking systems, and container pickup efficiency. During the pandemic, many US truck drivers reported long waiting times, significant empty runs, chaotic booking systems, and inconsistent container status information.
Therefore, the FMC specifically included truck turnaround times and booking systems in its investigation.
The US later discovered that the chassis market was also highly concentrated and dominated by Chinese manufacturers.
The FMC also investigated China's control over containers and chassis, subsequently releasing a 28-page report.
This seems to demonstrate the US's heightened concern about the dominance of "Made in China" in supply chains.
Now it's the container manufacturers' turn.
Was the surge in container prices during the pandemic truly something that could be manipulated? I think most people know the answer.
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