Teo Siong Seng & other alleged shipping container cartel execs sued by US firms for price-fixing

Singapore shipping mogul Teo Siong Seng and several other executives were named in two civil lawsuits in the United States over an alleged global price-fixing scheme.

These class-action lawsuits, filed by American manufacturers, are separate from a criminal indictment brought forward by the US Department of Justice (DOJ).

Since being named by the U.S. DOJ in May, Teo has taken a leave of absence from his leadership roles, The Straits Times (ST) reported. These include his position as chairman of the Singapore Business Federation (SBF), pro-chancellor at the National University of Singapore (NUS), and member of the Singapore Economic Resilience Taskforce. He has also stepped back from his duties at shipping firm Pacific International Lines (PIL).

Class action lawsuits

The civil lawsuits were filed in California on Jun. 2 and 9 by manufacturing firm C.A. Spalding Company and shipping company Daybreak Express, according to ST.

The American firms are separately seeking to recoup millions of dollars in losses allegedly caused by the container cartel over several years.

C.A. Spalding, which supplies components to the aerospace and automotive industries, claimed it was forced to overpay for container shipping.

CNA reported that the firm is seeking "multiple or treble damages" in monetary relief, meaning the defendants could be ordered to pay three times the actual financial losses suffered by US businesses.

US criminal indictment

The US Justice Department indictment, filed on Jan. 22 and unsealed on May 19, accused several companies of orchestrating a price-fixing conspiracy.

The DOJ named five entities and two unnamed manufacturers as being in a cartel that collectively controls over 95 per cent of the world's standard dry container market. Teo is the chief executive of one of the named firms, Singamas Container Holdings. The other companies include China International Marine Containers (CIMC), Shanghai Universal Logistics Equipment, and CXIC Group Containers.

Federal prosecutors stated that the cartel's customers included "major US-based shipping lines, logistics companies, and container lessors".

The alleged price-fixing ultimately led to shipping delays and higher prices for American consumers.

According to the indictment, the accused companies artificially inflated prices by restricting container output. They allegedly did this by limiting the number of shifts and hours that each production line could run daily, installing video surveillance cameras to ensure "no company violated the agreed-upon output restrictions", and agreeing not to build any new container manufacturing factories.

As a result, between 2019 and 2021, the price of a standard shipping container roughly doubled from US$1,600 (S$2,060) to US$3,500 (S$4,507). The DOJ noted that this surged the manufacturers' profits by approximately one hundredfold.

The alleged conspiracy lasted over four years, from November 2019 to January 2024.

According to the documents,  a Singamas executive reportedly told Teo that he had reminded the other members "not to be high profile since it might violate the monopoly law or be accused of price manipulation by our customers”.

Teo had purportedly written in response to the executive: “We also need to keep low key.”

Teo's response

According to ST, in a statement on May 28, Teo announced he would not seek re-election as SBF chairman when his term ends on June 24.

"I have proactively decided to take these leaves of absence to afford myself sufficient time to attend to this matter, and for the best interests of the aforementioned organisations."