Almost a year to the month after it emerged that China’s manufacturing output of shipping containers would be extended to 96% of global output through the acquisition of Maersk Container Industry (MCI), the deal has been stopped by the US Department of Justice (DoJ).
According to the transaction, which last September appeared to be signed and sealed, the Danish line would have received $987.3 million from China International Marine Containers (CIMC) for MCI.
It was on course to be the largest transaction in Maersk’s history since it was founded in 1904.
It also meant that CIMC would have taken control of all MCI’s interests in Tinglev, Denmark, as well as Qingdao in China, where Maersk’s research and development, and its container manufacturing concerns, are respectively based.
Not long after last September’s news of MCI’s sale to CIMC was announced, it also emerged that China was in the process of establishing a state-owned company to oversee its freight concerns, China Logistics Group (CLG).
News of the formation of CLG confirmed fears that the Asian giant was on the verge of gaining an inordinate amount of say in global containerisation.
In addition, said the DOJ, the merging of CIMC and MCI would have resulted in China gaining a lion’s share of the world market in refrigerated container manufacturing.
Patrick Any, chief financial officer of the line’s holding company, A.P. Moller – Maersk, said with the sale having fallen through, it was back to business as usual for MCI.
Maersk will now look at the long-term development of its container manufacturing interests.
CIMC has yet to react to the development.
It is also not clear what effect this could have on the formation of CLG as the two could be entirely separate from one another.
What is certain though is America’s intention to stamp its authority on the liner trade, especially after the Biden Administration announced judicial measures for greater liner trade scrutiny during his State of the Union Address in March.
One of the first steps it took was to fine German line Hapag-Lloyd $822 220 for 14 violations of the US Shipping Act.
It included 11 erroneous detention and demurrage charges for containers handled by Californian drayage firm, Golden State Logistics.
Now there’s this – the latest act of judicial engagement by the US, citing fears of China gaining monopolistic control of global supply chain concerns.
