Federal investigators are examining whether several Chinese companies intentionally reduced global production of standard shipping containers in late 2019, just before the COVID-19 pandemic, sources told CBS News. The firms in question together account for a large share of the world’s unrefrigerated container manufacturing.
According to people familiar with the probe, the companies slowed output by cutting employee hours in late 2019 — a move investigators view as possible evidence of a coordinated effort to limit supply and push up prices. The Justice Department declined to comment when asked.
The timing of the alleged production cuts preceded one of the most disruptive periods for global trade. China reported the first cluster of COVID-19 cases in December 2019, and the outbreak spread widely in early 2020. The U.S. International Trade Commission later found that in the second half of 2020 there were not enough containers to meet storage demands amid an unexpected surge in imports, while container manufacturing lagged behind shipping activity.
The ITC noted that container demand fell in the first half of 2020 — with some boxes tied up in long-term storage — but then rebounded faster than forecast in the second half of the year, straining the distribution system. During that period, some ocean carriers returned containers empty to speed turnaround for incoming imports.
Sources told CBS News that several Chinese executives have been indicted in connection with the investigation, and that the Justice Department planned to unseal an indictment. One executive was reportedly detained in France about three weeks ago and remains in custody pending an intended U.S. extradition.
The developments unfolded days after President Trump returned from a visit to Beijing, where he described new trade agreements that included aircraft purchases, energy and agricultural sales. According to sources, some U.S. officials tried to keep the case from becoming public until after the presidential summit.