News / US accuses major Chinese container manufacturers of price fixing

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China’s container manufacturing heavyweights are on the ropes, having been indicted by the US Justice Department (DoJ) for conspiring to fix prices and restrict equipment

Ironically, the news broke just as President Trump returned from a visit to Beijing intended to thaw relations with China.

Alongside seven executives, China International Marine Containers (CIMC), CXIC Group Containers, Shanghai Universal Logistics Equipment and Singamas Container Holdings have been indicted over claims they colluded to limit container production and fix prices.

US attorney for the Northern District of California Craig Missakian said: “These defendants, as alleged, sought to exploit a global pandemic to increase their own profits. We will not tolerate any attempt to manipulate free markets.”

DoJ officials this week unsealed the indictment claiming a “multi-year conspiracy” resulted in the doubling of shipping container prices between 2019 and 2021 and a one hundredfold increase in the box manufacturers’ profits.

Of the seven individuals involved, former Singamas marketing director Vick Nam Hing Ma was arrested in France in mid-April and is awaiting extradition to the US to stand trial – his arrest resulted in the decision to unseal the indictment

His six co-defendants remain at large and include former CIMC, CXIX, and Singamas CEOs Boliang Mai, Yuqiang Zhang, and Siong Seng Teo – all are believed to be residing in China, except Mr Teo who is thought to be in Singapore.

At the centre of the alleged conspiracy was an effort to artificially restrict the output of new containers hitting the market, thereby allowing the manufacturers to significantly ramp up prices.

The impact of this became particularly pronounced within months, when lockdowns essentially stranded available equipment all over the world, exacerbating the shortfall and further spiking demand for new boxes to be made available.

According to the indictment, those accused entered into a written agreement which required them to limit “the number of shifts and hours that each production line for standard dry containers could run per day” and prevent additional production lines being added to existing operations.

Furthermore, this “Moon Gazing Fund Contract” required the conspirators to install CCTV… “in all production lines in March 2020” and to submit a deposit for each factory that would be lost if any factory broke the agreement.

Reports have suggested that US authorities began tracking the companies’ prices in 2020 or 2021, with the DoJ later blocking CIMC’s efforts to acquire Maersk’s reefer manufacturing unit, Maersk Container Industry, for $1bn in 2022.

Had the deal gone through, it would have combined two of the world’s four suppliers of insulated containers, handed a 90% market share to Chinese state-owned enterprises, and “cemented CIMC’s dominant position in an already consolidated industry”, said the DoJ.

Following the indictment’s unsealing, the share prices of all the indicted box manufacturers collapsed.