The Korea Fair Trade Commission has also launched an investigation into China International Marine Containers (CIMC), Shanghai Universal Logistics Equipment (also known as Dongfang International Container), Singamas and CXIC Group Containers for the same cartel-like behaviour alleged by the US Department of Justice (DoJ).
Between 2019 and 2024, the four manufacturers, which produce 95% of the world’s container supply, are said to have colluded to limit output to raise prices.
As the shortage of containers was exacerbated during Covid, prices rocketed, bringing the manufacturers record profits.
The KFTC wants to see if their actions led South Korean shipping lines to pay “unreasonably inflated prices” for containers – estimating they could have paid as much as $35m during the period.
Before the alleged collusion, in 2019, the price of a 20ft container was around $1,750; this more than doubled, to $3,690 in 2021; while the price of a 40ft box also more than doubled, from $2,800 to $5,940.
Since then, prices have corrected, but remain over $2,000 for a 20ft container.
The KFTC is empowered to investigate overseas cartel activities and impose fines if South Korean companies are impacted. It plans to work with foreign competition authorities, such as the DoJ, during the probe.
South Korea has 13 container lines, including HMM, KMTC Line, and SM Line.
For the KFTC to fine Chinese companies, it needs to calculate the related sales to South Korean shipping companies. For collusion, fines of up to 20% of the related sales can be imposed.
If the KFTC imposes fines on the container makers, the South Korean shipping companies could sue them for damages, as US companies CA Spalding and Atlantic Container have done.
And the KFTC’s move means antitrust regulators from more countries are expected to initiate investigations.
The container manufacturers did not respond to The Loadstar’s request for comment.
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