Experts Warn of China’s Near-Monopoly on Freight Container Production, Global Supply Chain At Risk

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Expert says it’s ‘deeply concerning’ China produces 95 percent of the world’s shipping containers

A recent report from the U.S. Federal Maritime Commission (FMC) showed that China’s control of global container manufacturing poses a threat to supply chains and economies worldwide.

On March 30, FMC Commissioner Carl Bentzel released his assessment (pdf) of China’s control of container and intermodal chassis manufacturing after a year of research, market observation, and synthesis interviews.

The report points out that the three largest Chinese manufacturers control over 86 percent of the world’s supply of intermodal chassis. Those same companies manufacture over 95 percent of the 44.2 million containers used in global shipping, including U.S. domestic train and truck intermodal containers.

According to Bentzel’s assessment, the Chinese communist regime effectively controls the world’s container and chassis production, arguing that Beijing may manipulate market prices and add to the global supply chain disruptions.

“When demand for ocean containers increased, Chinese-based intermodal equipment manufacturers were notably slow in ramping up production, raising the question of whether this was part of a deliberate strategy to manipulate prices,” the report said.

The prices for Chinese manufactured containers had risen to $6,500 in 2021 from $1,600 in 2019, a nearly 400 percent increase over pre-pandemic prices. Meanwhile, container leasing rates were also up by around 50 percent in the span of six months before November 2020.

The report called China’s near defacto worldwide monopoly in shipping container production “deeply concerning.”

China’s Rise to Container Production Monopoly

Containers are one of the key elements of globalization. Ocean freight costs were high before the wide use of intermodal containers. Cargo loading and unloading efficiency at the port terminals were sometimes even longer than the ship’s sailing time.

Today, 95 percent of industrial products worldwide are shipped via containerized intermodal freights.

The United States was the largest producer of freight containers in the 1960s. However, due to changing economic and logistical factors, production centers soon moved to Europe and later to Japan and South Korea. In 1991, South Korea became the world’s largest container producer, with an annual output of 349,000 TEU, according to Jiemian News, a Chinese financial news site.

Twenty-foot and 40-foot containers are the most commonly used containers for shipping. A standard 20-foot container is referred to as a TEU (Twenty-foot Equivalent Unit), while a 40-foot container is two TEUs.

By Shawn Lin

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