Ocean Carrier Cartel Behind 300% Spike in China-US Container Rates, Analysis Suggests

A dramatic rise in container shipping costs from China to the US West Coast—over 300% from March to June—has little to do with surging consumer demand, a new analysis from freight market intelligence firm FreightWaves contends. Instead, the report points to strategic capacity cuts by a handful of foreign-owned ocean carriers, accusing them of effectively operating as a cartel to squeeze US importers.

How Carriers Control Capacity and Push Up Rates

At the heart of the rate surge is a practice known as blank sailing, where carriers cancel scheduled voyages to intentionally reduce the supply of vessel space. By taking ship capacity offline, they create artificial scarcity on major trade lanes like the trans-Pacific route from China to the United States. With fewer containers moving, spot rates—the real-time prices paid by shippers without long-term contracts—can be driven sharply higher even when end-consumer demand remains stable.

The concentrated structure of the industry amplifies this effect. Just three global shipping alliances—2M, Ocean Alliance, and THE Alliance—control the vast majority of containerized freight capacity on east-west trades. These groupings allow member lines to coordinate vessel deployments and schedule adjustments without formally merging, raising significant concerns about anti-competitive behavior.

FreightWaves analyst Craig Fuller noted that the current price spike cannot be explained by any proportional surge in import demand, suggesting instead that carriers are taking advantage of their market power. The following factors have contributed to the recent rate environment:

• Major ocean carriers systematically cancel (blank) sailings to reduce available vessel space.
• Three global shipping alliances dominate the market, enabling coordinated capacity decisions.
• Spot market rates have spiked over 300% as importers compete for scarcer shipping slots.
• The Federal Maritime Commission has limited power to quickly counter such practices without legislative change.

Implications for US Businesses and Regulatory Outlook

American importers—from large retailers to small manufacturers—are bearing the brunt of inflated freight costs. Many rely on a mix of contract and spot rates to move goods, and when spot rates skyrocket, supply chain budgets are quickly exhausted. The added expense can cascade through the economy, contributing to higher consumer prices or squeezed profit margins for businesses already navigating inflationary pressures.

This is not the first time ocean carriers have faced accusations of capacity manipulation. During the early months of the COVID-19 pandemic, blank sailings skyrocketed even as demand for goods rebounded quickly, sending container rates from Asia to the US West Coast to over $20,000 per forty-foot equivalent unit (FEU) at their peak. The resulting public and political pressure led Congress to pass the Ocean Shipping Reform Act of 2022, which gave the FMC more teeth to investigate and enforce rules against unreasonable practices. Yet, as the current surge demonstrates, the agency’s expanded toolkit may still fall short of taming a market dominated by a few powerful foreign-owned lines.

The situation puts many small and mid-sized importers at a competitive disadvantage, as they often lack the leverage to negotiate favorable long-term contracts and are more exposed to spot market volatility. Larger players may shift to alternative ports or modes, but for time-sensitive goods, air freight is prohibitively expensive, leaving few escape hatches.

As the trans-Pacific trade enters the peak autumn shipping season, importers and regulators alike are bracing for continued volatility. Industry groups are urging the FMC to expand its oversight and are calling on Congress to provide additional resources and legal authority. The coming months will test whether regulatory scrutiny can moderate the pricing power of foreign-owned carrier alliances, or whether US shippers will face another grinding season of exorbitant freight bills.

Why This Matters

The analysis challenges the narrative that higher freight costs are simply a function of strong consumer demand, pointing instead to structural market power among a few shipping alliances. If left unchecked, such pricing power could systematically inflate supply chain costs for American businesses, feeding inflation and reducing competitiveness in a trade lane critical to the US economy.

FAQ

What caused the 300% surge in container rates from China to the US West Coast?

According to FreightWaves, the surge is primarily driven by strategic capacity cuts—known as blank sailings—by a concentrated group of foreign-owned ocean carriers, rather than a genuine increase in consumer demand. This coordinated reduction of available vessel space creates artificial scarcity that drives up spot prices.

Which carriers are involved in the alleged capacity manipulation?

The analysis does not single out specific lines but points to the dominant global shipping alliances—2M, Ocean Alliance, and THE Alliance—which collectively control the vast majority of container capacity on the trans-Pacific route. These alliances allow members to coordinate sailing schedules and capacity decisions.

How does this situation affect US businesses?

US importers, especially small and mid-sized firms without long-term contracts, face sharply higher shipping costs that can erode margins or force price increases on consumers. The unpredictability also complicates inventory planning ahead of the crucial holiday merchandise season.

What can regulators like the Federal Maritime Commission do about it?

The FMC has been investigating carrier practices and can require data on blank sailings, but its enforcement powers are limited under current law. Recent legislation like the Ocean Shipping Reform Act has given the agency more tools, though industry groups argue more authority is needed to curb excessive pricing power.

Sources

• FreightWaves (freightwaves.com)
• Federal Maritime Commission (fmc.gov)

Source: news – FreightWaves