Four Chinese manufacturers have been slapped with multiple lawsuits—this time from American businesses—after being indicted by the Justice Department last month on charges of price-fixing.
Two separate lawsuits have been filed against China-based container makers included in the indictment: China International Marine Containers (CIMC), Shanghai Universal Logistics Equipment (also known as Dong Fang International Containers), CXIC Group Containers and Singamas Container Holdings.
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Electrical parts and accessories manufacturer CA Spalding filed the first civil complaint on June 2, before trucking company Daybreak Express filed its complaint on June 9. Both lawsuits were filed in California’s northern district courts and named seven executives who were part of the original lawsuit as co-defendants.
In both cases, the plaintiffs alleged that they received damages for paying illegally inflated prices to transport goods after the manufacturers deliberately decided to leave the containers.
Citing the first indictment, Spalding said the conspirators allegedly had an agreement to sell “expensive” dry shipping containers to US businesses, “thereby fixing ‘part of the worldwide shipping costs…paid by US exporters.’
Four container shipping companies—and two other unnamed manufacturers listed on the DOJ’s list of cost participants—make up about 95 percent of the dry containers available worldwide.
According to the lawsuit, the container manufacturers agreed to limit the output of containers and fix prices in early November 2019, continuing until at least late January 2024.
This helped drive prices for standard dry shipping containers more than double between 2019 and 2021, with a 40-foot container going from about $2,800 to over $5,900 during that time. Procurement constraints between 2021 and 2022 in the later stages of the Covid-19 pandemic had limited capacity on container ships, which also contributed to a shortage of space and containers that raised the level of cargo at sea to record levels.
Like ocean carriers at the time, container manufacturers were struggling to record profits due to price increases. For example, the profit of CIMC’s container manufacturing business segment increased almost a hundredfold from $19.8 million in 2019 to $1.75 billion in 2021. Meanwhile, Singamas saw its net profit change from a loss of $110 million in 2019 to a profit of $186.8 billion later.
