China is “close de facto worldwide monopoly “of intermodal equipment” manufacturing should be deeply concerned “, according to US FMC Commissioner Carl Bentzel.
He has published a report on the United States’ almost total dependence on China for the manufacturer of containers and chassis.
One year in the making, Mr Bentzel’s 24-page report was provoked by an acute shortage of chassis and containers that have hampered intermodal operations in the United States, limiting its export market in the wake of the pandemic.
He said: “This report is important in what it represents – that as a country, our maritime equipment and industry are increasingly dependent on China.”
He noted that the three largest Chinese manufacturers controlled 86% of the world’s supply of intermodal chassis, and the same companies produced 95% of all new containers, including US domestic trains and trucks with intermodal 53-foot boxes.
Bentzel accused China’s state-owned producers of being “particularly slow in increasing production” when demand for container freight returned, claiming that the limited flow of equipment was partly caused by “the market manipulation of Chinese container manufacturers, which jointly decided to reduce production ”.
He added: “While the US government has spent the last 40 years deregulating our transportation industry, the Chinese government has used industrial policy planning to support Chinese companies in strategic sectors, including shipping, and specifically to support its state-owned companies and entire industries. .
“Our nation faces a fundamental political question: Should the shipping container be considered an essential piece of equipment by our country instead of being seen as a exchangeable commodity?”
According to consultant Drewry, a record high of 7.2 million was added last year. teu to the global container equipment fleet, bringing the total to 50.5 million. teu. It said containers on average took 30% longer to complete their transport cycles last year due to port, landside and transport delays.
Drewry said that although China dominated the market and accounted for about 97% of production last year, there were two container manufacturers entering the market in Vietnam this year, which in time would have a capacity of about 1 million. teu per year.
In terms of chassis, Mr Bentzel said, there were “pockets of chassis manufacturing outside China, such as Hyundai’s activities in Mexico and a growing number of smaller domestic chassis manufacturing operations”.
He admitted that the timing of protective ‘anti-dumping’ duties imposed on imports of chassis from China by the US Department of Commerce and the US International Trade Commission “could not have been worse due to the covid-19 pandemic-related cargo increases and congestion ”.
At the Long Beach TPM conference last month, industry veteran and now CEO of chassis lessor Flex-Van Ronald Widdows said trade war rates for chassis “were not such a good idea,” given the lack of production capacity in the United States.
“The domestic chassis is coming, but production will not be fast enough,” Mr. Widdows.
Nevertheless, despite the current shortage of newly built chassis, Mr Bentzel believes that the shift from dependence on Chinese manufacturers in the long run will be beneficial.
“The long-term value of not having to rely on monopolistic control in the chassis manufacturing market will outweigh the temporary short-term costs,” he said.