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SAN FRANCISCO (CN) — The Department of Justice is accusing several Chinese shipping container manufacturers and their executives of conspiring to restrict the production of shipping containers during the Covid-19 pandemic, according to federal prosecutors in an indictment unsealed Tuesday.
In the superseding indictment, filed in U.S. District Court for the Northern District of California on Jan. 22, prosecutors claim the companies and their executives agreed to restrict the output and fix the prices of standard dry shipping containers used to carry goods across the oceans.
“These defendants, as alleged, sought to exploit a global pandemic to increase their own profits. Their illegal agreement to fix prices and limit supply of these shipping containers resulted in the American consumer paying more and waiting longer for critical goods,” U.S. Attorney for the Northern District of California Craig H. Missakian said in a press release.
The government claims the four shipping container manufacturing companies charged in the indictment — which are responsible for around 95% of the world’s dry shipping containers — restricted the production of the shipping containers from at least 2019 through 2024, nearly doubling the pricing of the containers and increasing manufacturer profits dramatically.
According to the indictment, the companies restricted container manufacturing by limiting the hours that each production line could run per day and not building any new container manufacturing facilities. Nearly 90 video surveillance cameras were installed on production lines to ensure the companies were complying with the agreed-upon limits, the government says.
“Global price-fixing cartels strike at the heart of our economic liberty. The defendants held hostage the world’s supply of ocean shipping containers during the Covid pandemic when our supply chains needed it the most. They stole from everyday Americans who paid more and waited longer for vital goods as a result,” Acting Assistant Attorney General Omeed A. Assefi of the DOJ’s antitrust division said in a press release.
The government says the companies involved in the scheme saw a surge in profits as a result of the conspiracy. One company, China International Marine Containers, went from bringing in around $19.8 million in 2019 to $1.75 billion in 2021. Another company, Singamas Container Holdings, saw income increase from a loss of around $110 million in 2019 to a profit of $187 million in 2021, according to the government.
A total of seven executives and four companies are charged with conspiracy in restraint of trade, which carries a maximum of 10 years in prison, a $1 million fine for individuals and a $100 million fine for corporations.
One executive, Vick Nam Hing Ma, was arrested in France on April 14, and his extradition is pending, according to the government. The six other executive co-defendants are still at large.
Representatives for the defendant companies did not immediately respond to a request for comment.
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