The U.S. Department of Justice announced on Tuesday (May 19) that it has filed criminal charges against 7 Chinese executives and 4 Chinese shipping container manufacturing companies, accusing them of colluding to limit production and manipulate container prices during the COVID-19 pandemic and the global supply chain crisis, leading to a hundredfold increase in their profits.
The Antitrust Division of the Department of Justice stated that the 4 companies involved collectively manufacture about 95% of the world’s standard dry cargo shipping containers. Prosecutors allege that this multinational monopoly conspiracy dates back as early as November 2019 and lasted at least until January 2024, causing the price of standard containers to roughly double between 2019 and 2021, forcing American consumers to pay higher costs for goods and endure longer wait times.
“Fraudsters will never succeed.” Deputy Attorney General Stanley Woodward declared when announcing the case, emphasizing that the Department of Justice is ensuring accountability when Americans’ wallets are being stolen.
According to the additional indictment publicly released by the U.S. District Court for the Northern District of California on Tuesday, a total of 11 defendants are charged, including 4 container manufacturing giants and 7 executives. Among them, 54-year-old Vick Nam Hing Ma, the Market Director of Singamas Container Holdings Ltd., was arrested in France on April 14 and is currently awaiting extradition to the United States. The other 6 co-defendant executives are currently fugitives.
The 4 companies involved are engaged in the manufacturing and sale of dry cargo shipping containers, with clients all over the United States and worldwide. The list of those indicted is as follows:
– Singamas Container Holdings Ltd. (Singamas): A publicly-traded company incorporated under Hong Kong law.
– China International Marine Containers (Group) Co., Ltd. (CIMC): A publicly-traded company incorporated under Beijing law.
– Shanghai Universal Logistics Equipment Co., Ltd. (DFIC): A company incorporated under Beijing law, branded as “Eastern International Containers”.
– CXIC Group Containers Co. Ltd. (CXIC): A company incorporated under Beijing law.
The indictment revealed that as early as November 14, 2019, Yongbo Wan and Tianhua Huang of CIMC, Qianmin Li of DFIC, and Yuqiang Zhang of CXIC, along with another co-conspirator company executive, held a clandestine meeting at the CIMC headquarters in Shenzhen to reach an illicit agreement to limit production and raise prices. Subsequently, Singamas joined the monopoly organization before March 2020.
To prevent members from “cheating” in the production limit agreement, they resorted to extreme measures, including installing 87 video surveillance cameras on the 49 dry container production lines of all members, strictly restricting daily shifts and operating hours, and agreeing not to construct any new factories.
This conspiracy resulted in astronomical profits for each company: CIMC’s container business profits surged from about $19.8 million in 2019 to about $1.75 billion in 2021; Singamas also transformed from a loss of about $110 million in 2019 to a profit of about $186.8 million in 2021.
Acting Deputy Assistant Attorney General Omeed A. Assefi emphasized, “Global price-fixing cartels strike at the core of our economic freedom. The defendants held the world hostage with shipping containers during the most vulnerable period of the supply chain, essentially robbing ordinary Americans.”
He stated that the Antitrust Division of the Department of Justice will hold accountable anyone in the world who seeks unlawful gains at the expense of Americans.
Under Section 1 of the Sherman Antitrust Act, individuals found in violation of the law can face up to 10 years in prison and a fine of $1 million, while companies can be fined up to $100 million; fines can also be increased to twice the proceeds of the crime or the losses suffered by victims.