Linerlytica counters US DOJ cartel allegations

Data pointed to higher production during the pandemic cycle.

Container shipping data provider Linerlytica has disputed the US Department of Justice’s (DOJ) antitrust case against six Chinese container manufacturers, saying its analysis of 25 years of production data shows the 2021 price spike was driven by demand during the pandemic, not production cuts.

The US DOJ charged executives from China International Marine Containers (CIMC), Shanghai Universal Logistics Equipment, Singamas Container, and CXIC Group Containers, along with two unnamed firms, with allegedly fixing prices and restricting output of standard dry shipping containers between November 2019 and January 2024.

The DOJ said the alleged cartel caused container prices to roughly double between 2019 and 2021 with the four named companies accounting for more than 95% of global new container production.

According to a market pulse release by Linerlytica, manufacturers increased output during the period instead of cutting it. It said new dry freight container production reached a record 6.61-million twenty-foot equivalent units (TEU) in 2021.

It added that output rose further to 7.85 million TEU in 2024, supported by demand linked to Red Sea shipping diversions.

Court documents made public on 19 May said executives from the companies met at CIMC’s Shenzhen headquarters in November 2019. They allegedly agreed to limit factory hours, avoid building new plants, and monitor production using surveillance cameras.

The documents also said the group later coordinated output limits from 2022 onwards and set customer-specific quotas for US container lessors, shipping lines, and logistics firms.

The financial impact during the period was significant. CIMC’s container unit reported a profit of about $1.75b in 2021, up from $19.8m in 2019 whilst Singamas moved from a $110m loss in 2019 to a $186.8m profit in 2021.

Singamas is 41.7% owned by Singapore shipping company Pacific International Lines.

Its former chief executive Teo Siong Seng is amongst the seven executives named in the indictment. Singamas said neither the company nor Teo has received any legal process or documentation from the DOJ.

One defendant, Vick Nam Hing Ma, was arrested in France in April and is awaiting extradition to the United States whilst six executives remain at large.

The charges were filed under Section 1 of the Sherman Antitrust Act, which carries a maximum penalty of 10 years imprisonment for individuals and fines of up to $100m for corporations.

Linerlytica also added that container supply remains ample, with more than 1.2 million TEU of new inventory currently in China.