How three Chinese companies cornered global container production

Never before has the humble ocean shipping container been this important to American business. If you can’t get one, you can’t move your international cargo — and supply has never been tighter. The cost of global trade is now contingent on how many containers exist, where they are and where they aren’t.

How many containers exist is controlled by China. Virtually every ocean shipping container in the world is built there.

Just three Chinese companies account for the majority of production, with Chinese factories now building more than 96% of the world’s dry cargo containers and 100% of the world’s refrigerated containers, according to U.K. consultancy Drewry.

Carl Bentzel of the Federal Maritime Commission (FMC) said earlier this month, “I am concerned that this equipment is controlled by a state-owned enterprise and that we’re completely reliant, and I have questions about whether or not there’s been market manipulation of what is potentially a monopoly.”

U.S. shippers are indeed reliant on equipment manufactured by a very small number of state-linked Chinese companies that are said to be actively managing capacity. But beyond expressing concern, there’s nothing the FMC or anyone else in America can do about it.

To understand how container manufacturing came to be dominated by so few Chinese entities and why it’s commercially unfeasible for this equipment to be built competitively at scale in the U.S., American Shipper interviewed John Fossey, head of container equipment and leasing research at Drewry.

The good news, according to Fossey, is that the current global equipment capacity crunch should ease as port congestion lessens and with China on track to manufacture a record number of containers this year.

Source: American Shipper

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