CONTENTS

Page

i

Determinations............................................................................................................................... 1

Views of the Commission ............................................................................................................... 3

        Separate and dissenting views of Commissioners  

  Meredith M. Broadbent and F. Scott Kieff .................................................................................. 37

Part I: Introduction................................................................................................................ I‐1

Background................................................................................................................................ I‐1

Statutory criteria and organization of the report..................................................................... I‐1

Statutory criteria ................................................................................................................... I‐1

Organization of report........................................................................................................... I‐2

Market summary....................................................................................................................... I‐3

Summary data and data sources............................................................................................... I‐3

Previous and related investigations.......................................................................................... I‐4

Nature and extent of alleged subsidies and sales at LTFV........................................................ I‐4

Alleged subsidies................................................................................................................... I‐4

Alleged sales at LTFV ............................................................................................................. I‐5

The subject merchandise .......................................................................................................... I‐5

Commerce’s scope ................................................................................................................ I‐5

Tariff treatment..................................................................................................................... I‐7

The product............................................................................................................................... I‐7

Description and applications................................................................................................. I‐7

Manufacturing processes.................................................................................................... I‐11

Domestic like product issues................................................................................................... I‐12

Part II: Conditions of competition in the U.S. market............................................................ II‐1

U.S. market characteristics....................................................................................................... II‐1

Channels of distribution........................................................................................................... II‐2

Geographic distribution ........................................................................................................... II‐2

Supply and demand considerations......................................................................................... II‐3

U.S. supply ............................................................................................................................ II‐3

U.S. demand ......................................................................................................................... II‐5
  

CONTENTS

Page

ii

Substitutability issues............................................................................................................... II‐7

Lead times ............................................................................................................................ II‐8

Comparison of U.S.‐produced and imported certain domestic containers......................... II‐9

Part III: U.S. producer’s production, shipments, and employment....................................... III‐1

U.S. producer........................................................................................................................... III‐1

Prospective U.S. producer....................................................................................................... III‐2

U.S. production, capacity, and capacity utilization................................................................. III‐3

U.S. producer’s U.S. shipments and exports........................................................................... III‐3

U.S. producer inventories........................................................................................................ III‐4

U.S. employment, wages, and productivity ............................................................................ III‐4

Part IV: U.S. imports, apparent U.S. consumption, and market shares ................................IV‐1

U.S. importers..........................................................................................................................IV‐1

U.S. imports............................................................................................................................. IV‐2

Negligibility.............................................................................................................................. IV‐3

Apparent U.S. consumption and u.s. market shares ..............................................................IV‐3

Part V: Pricing data...............................................................................................................V‐1

Factors affecting prices............................................................................................................V‐1

Raw material costs ...............................................................................................................V‐1

Transportation costs to the U.S. market..............................................................................V‐2

Pricing practices .......................................................................................................................V‐2

Pricing methods....................................................................................................................V‐2

Price data..................................................................................................................................V‐3

Price trends and comparisons..............................................................................................V‐4

Questionnaire bid data.........................................................................................................V‐5

Lost sales and lost revenue ......................................................................................................V‐6
  

CONTENTS

Page

iii

Part VI: Financial experience of the U.S. producer...............................................................VI‐1

Introduction.............................................................................................................................VI‐1

Operations on certain domestic containers............................................................................VI‐1

Capital expenditures, research and development expenses, and total assets...................VI‐2

Capital and investment........................................................................................................VI‐3

Part VII: Threat considerations and information on nonsubject countries..........................VII‐1

The industry in China..............................................................................................................VII‐3

U.S. inventories of imported merchandise ............................................................................VII‐4

U.S. importers’ outstanding orders........................................................................................VII‐4

Antidumping or countervailing duty orders in third‐country markets..................................VII‐5

Information on nonsubject countries....................................................................................VII‐5

Appendixes

A. Federal Register notices.................................................................................................... A‐1

B. List of conference witnesses............................................................................................. B‐1

C. Summary data................................................................................................................... C‐1

D. Purchaser/end user price data..........................................................................................D‐1

Note.—Information that would reveal confidential operations of individual concerns may not

be published and therefore has been deleted.  Such deletions are indicated by asterisks.

UNITED STATES INTERNATIONAL TRADE COMMISSION

Investigation Nos. 701‐TA‐514 and 731‐TA‐1250 (Preliminary)

53‐FOOT DOMESTIC DRY CONTAINERS FROM CHINA

DETERMINATIONS

On the basis of the record1 developed in the subject investigations, the United States

International Trade Commission (Commission) determines, pursuant to sections 703(a) and

733(a) of the Tariff Act of 1930 (19 U.S.C. '' 1671b(a) and 1673b(a)) (the Act), that there is a

reasonable indication that the establishment of an industry in the United States is materially

retarded by reason of imports from China of 53‐foot domestic dry containers, provided for in

heading 8609.00.00 of the Harmonized Tariff Schedule of the United States, that are alleged to

be sold in the United States at less than fair value (“LTFV”), and that are allegedly subsidized by

the Government of China.2

COMMENCEMENT OF FINAL PHASE INVESTIGATIONS   

Pursuant to section 207.18 of the Commission=s rules, the Commission also gives notice

of the commencement of the final phase of its investigations.    The Commission will issue a

final phase notice of scheduling, which will be published in the Federal Register as provided in

section 207.21 of the Commission=s rules, upon notice from the Department of Commerce

(Commerce) of affirmative preliminary determinations in the investigations under sections

703(b) or 733(b) of the Act, or, if the preliminary determinations are negative, upon notice of

affirmative final determinations in those investigations under sections 705(a) or 735(a) of the

Act.    Parties that filed entries of appearance in the preliminary phase of the investigations

need not enter a separate appearance for the final phase of the investigations.    Industrial

users, and, if the merchandise under investigation is sold at the retail level, representative

consumer organizations have the right to appear as parties in Commission antidumping and

countervailing duty investigations.    The Secretary will prepare a public service list containing

the names and addresses of all persons, or their representatives, who are parties to the

investigations.

BACKGROUND

On April 23, 2014, petitions were filed with the Commission and Commerce by

Stoughton Trailers, LLC, Stoughton, Wisconsin, alleging that the establishment of a domestic

industry is materially retarded and that an industry in the United States is materially injured or

threatened with material injury by reason of LTFV and subsidized imports of 53‐foot domestic

 

      1 The record is defined in sec. 207.2(f) of the Commission=s Rules of Practice and Procedure (19

CFR ' 207.2(f)).

      2 Commissioners Broadbent and Kieff dissenting.   
dry containers from China.    Accordingly, effective April 23, 2014, the Commission instituted

countervailing duty Inv. No. 701‐TA‐514 and antidumping duty Inv. No. 731‐TA‐1250

(Preliminary).

Notice of the institution of the Commission=s investigations and of a public conference

to be held in connection therewith was given by posting copies of the notice in the Office of the

Secretary, U.S. International Trade Commission, Washington, DC, and by publishing the notice

in the Federal Register of April 29, 2014 (79 FR 24005).    The conference was held in

Washington, DC, on May 14, 2014, and all persons who requested the opportunity were

permitted to appear in person or by counsel.
3

Views of the Commission

Based on the record in the preliminary phase of these investigations, we find that there

is a reasonable indication that the establishment of an industry in the United States is

materially retarded by reason of imports of 53‐foot domestic dry containers from China that are

allegedly sold in the United States at less than fair value and are allegedly subsidized by the

Government of China.1

I. The Legal Standard for Preliminary Determinations

The legal standard for preliminary antidumping and countervailing duty determinations

requires the Commission to determine, based upon the information available at the time of the

preliminary determinations, whether there is a reasonable indication that a domestic industry is

materially injured or threatened with material injury, or that the establishment of an industry is

materially retarded, by reason of the allegedly unfairly traded imports.2  In applying this

standard, the Commission weighs the evidence before it and determines whether (1) the record

as a whole contains clear and convincing evidence of no material injury or threat of such injury

or that the establishment of an industry is not materially retarded by subject imports; and

(2) no likelihood exists that evidence leading to a contrary result will arise in a final

investigation.3

II. Background

Parties to the Investigations.  The petitions in these investigations were filed on April

23, 2014 by Stoughton Trailers, LLC (“Stoughton”) of Stoughton, Wisconsin, a U.S. firm that

produced 53‐foot domestic dry containers (herein “certain domestic containers”) during

portions of the January 1, 2011 to March 31, 2014 period of investigation (“POI”).4  Stoughton

appeared at the staff conference and submitted a postconference brief.

                                                      

1 Commissioners Broadbent and Kieff dissenting.  They find no reasonable indication that the

establishment of a domestic industry is materially retarded by reason of subject imports from China.  

Commissioners Broadbent and Kieff join sections II through V.A.2 of these Views, except as otherwise

noted.  See Separate and Dissenting Views of Commissioners Broadbent and Kieff.

2 19 U.S.C. §§ 1671b(a), 1673b(a) (2000); see also American Lamb Co. v. United States, 785 F.2d

994, 1001‐04 (Fed. Cir. 1986); Aristech Chem. Corp. v. United States, 20 CIT 353, 354‐55 (1996).

3 American Lamb, 785 F.2d at 1001; see also Texas Crushed Stone Co. v. United States, 35 F.3d

1535, 1543 (Fed. Cir. 1994).

4 In this industry, the modifier “domestic” encompasses not only certain types of containers

made in the United States but also in China that are designed to move dry goods using more than one

mode of (intermodal) transportation, most commonly on a container chassis for on‐the‐road

transportation and on a well car for rail transportation.  Confidential Report, Memorandum INV‐MM‐

053 (June 2, 2014), as modified by INV‐MM‐054 (June 5, 2014) and INV‐MM‐055 (June 5, 2014) (“CR”) at

I‐6 to I‐8; Public Report, 53‐Foot Domestic Dry Containers from China, Inv. Nos. 701‐TA‐514 and 731‐TA‐

1250 (Preliminary), USITC Pub. 4474 (June 2014) (“PR”) at I‐5 to I‐6.
4

Several respondent entities participated in the preliminary phase of these

investigations.  Interested parties that appeared through counsel, participated in the staff

conference, and filed postconference submissions included foreign producer/exporter/importer

China International Marine Containers (Group), Ltd. (“CIMC”) and foreign producer/exporter

Singamas Management Services, Ltd. and its importer affiliate Singamas North America

(collectively “Singamas”)), as well as two importers of subject merchandise that are also

purchasers of certain domestic containers (J.B. Hunt Transport, Inc. (“J.B. Hunt”), a leading

provider of integrated transportation services and Hub City Terminals, Inc. (“Hub”), the owner

and operator of the second largest non‐rail fleet of certain domestic containers).  

Representatives from two purchasers of certain domestic containers, Norfolk Southern

Corporation (“Norfolk Southern”), a railroad company, and Schneider National (“Schneider”), a

leading provider of truckload and logistics and intermodal services, also participated in the staff

conference.

Data Coverage.  U.S. industry data are based on the questionnaire response of

Stoughton, which accounted for all known U.S. production of certain domestic containers

during the POI.5  U.S. imports are based on the reported exports to the United States of certain

domestic containers by the only two known producers in China (CIMC and Singamas).6

  With

respect to traditional quarterly weighted‐average pricing data, the sales data provided by

Stoughton account for 100 percent of U.S. producers’ shipments of certain domestic containers.  

*** importers (the two foreign producers serving as importers of record and *** U.S. end users

that were importers of record) provided usable pricing data, and their data accounted for ***

of U.S. imports from China during the POI.7  Additionally, the Commission received purchase

cost data from *** U.S. purchasers/end users that were not importers.8

  The Commission

                                                      

5 CR at I‐5; PR at I‐3 to I‐4.

6 CR at I‐5; PR at I‐4.  The applicable HTS heading encompasses all containers and not just certain

domestic containers.  The Commission issued importer questionnaires to firms identified in the petitions

and those firms that based on a review of data provided by U.S. Customs and Border Protection may

have accounted for more than 0.2 percent of total imports under HTS heading 8609.00.00 during

January 2011 to January 2014 (the period for which Customs data were available).  Seven firms

identifying themselves as importers of record of certain domestic containers submitted usable importer

questionnaire responses; their imports were equivalent to *** of exports of certain domestic containers

reported by the two responding producers of subject merchandise in China.  CR at IV‐1 & n.1; PR at IV‐1

& n.1.

7 CR at V‐5; PR at V‐3 (noting that these data do not include information reported by importer

*** because it submitted data for a product of substantially different specifications).  CIMC and

Singamas submitted sales data, whereas other U.S. importers submitted purchase cost data.  Sales price

refers to the price for which goods are sold; purchase cost refers to the price paid by a purchaser, and

these values often differ due to markups and other transaction costs.  CR at V‐4 & n.14; PR at V‐3 &

n.14.  According to CIMC and Singamas, their reported sales price data are comparable to purchase cost

data reported by their customers.  CR at V‐4 & n.14; PR at V‐3 & n.14.

8 CR at V‐7; PR at V‐4; CR/PR at Appendix D.  The Commission also requested information

regarding bids for the five highest‐value purchases of certain domestic containers that were issued by

end users to foreign producers and the U.S. manufacturer for delivery between January 1, 2013 through

(Continued...)
5

received responses to its questionnaires from two foreign producers/exporters of subject

merchandise (CIMC and Singamas), whose exports to the United States accounted for

approximately all U.S. imports of certain domestic containers from China during the POI and

whose production accounts for all known production of such merchandise in China.9

  Stoughton

and respondents agreed that there are no known producers of certain domestic containers in

nonsubject countries and thus no known U.S. imports from such countries.10

III. Domestic Like Product

A. Legal Standard and Scope of Investigations

In determining whether there is a reasonable indication that an industry in the United

States is materially injured or threatened with material injury or that the establishment of a

domestic industry is materially retarded by reason of imports of the subject merchandise, the

Commission first defines the “domestic like product” and the “industry.”11  Section 771(4)(A) of

the Tariff Act of 1930, as amended (“the Tariff Act”), defines the relevant domestic industry as

the “producers as a whole of a domestic like product, or those producers whose collective

output of a domestic like product constitutes a major proportion of the total domestic

production of the product.”12  In turn, the Tariff Act defines “domestic like product” as “a

product which is like, or in the absence of like, most similar in characteristics and uses with, the

article subject to an investigation.”13

The decision regarding the appropriate domestic like product(s) in an investigation is a

factual determination, and the Commission has applied the statutory standard of “like” or

“most similar in characteristics and uses” on a case‐by‐case basis.14  No single factor is

                                                                                                                                                                              

(...Continued)

March 31, 2014.  The Commission received usable information regarding *** bid events.  CR at V‐9 to V‐

11; PR at V‐4.

9 CR at VII‐3; PR at VII‐3.

10 CR at VII‐8; PR at VII‐5; Petitions, Vol. I at 12; Confer. Tr. at 134‐35 (Morgan, Delozier, Cerny,

Drella, Dean).

11 19 U.S.C. § 1677(4)(A).

12 19 U.S.C. § 1677(4)(A).

13 19 U.S.C. § 1677(10).

14 See, e.g., Cleo Inc. v. United States, 501 F.3d 1291, 1299 (Fed. Cir. 2007); NEC Corp. v.

Department of Commerce, 36 F. Supp. 2d 380, 383 (Ct. Int’l Trade 1998); Nippon Steel Corp. v. United

States, 19 CIT 450, 455 (1995); Torrington Co. v. United States, 747 F. Supp. 744, 749 n.3 (Ct. Int’l Trade

1990), aff’d, 938 F.2d 1278 (Fed. Cir. 1991) (“every like product determination ‘must be made on the

particular record at issue’ and the ‘unique facts of each case’”).  The Commission generally considers a

number of factors including the following:  (1) physical characteristics and uses; (2) interchangeability;

(3) channels of distribution; (4) customer and producer perceptions of the products; (5) common

manufacturing facilities, production processes, and production employees; and, where appropriate,

(6) price.  See Nippon, 19 CIT at 455 n.4; Timken Co. v. United States, 913 F. Supp. 580, 584 (Ct. Int’l

Trade 1996).
6

dispositive, and the Commission may consider other factors it deems relevant based on the

facts of a particular investigation.15  The Commission looks for clear dividing lines among

possible like products and disregards minor variations.16  Although the Commission must accept

Commerce’s determination as to the scope of the imported merchandise that is subsidized

and/or sold at less than fair value,17 the Commission determines what domestic product is like

the imported articles Commerce has identified.18  The Commission may, where appropriate,

include domestic articles in the domestic like product in addition to those described in the

scope.19

In its notices of initiation, Commerce defined the imported merchandise within the

scope of these investigations as follows:

closed (i.e., not open top) van containers exceeding 14.63 meters (48 feet) but

generally measuring 16.154 meters (53 feet) in exterior length, which are

designed for the intermodal transport of goods other than bulk liquids within

North America primarily by rail or by road vehicle, or by a combination of rail and

road vehicle (domestic containers).  The merchandise is known in the industry by

varying terms including “53‐foot containers,” “53‐foot dry containers,” “53‐foot

domestic dry containers,” “domestic dry containers,” and “domestic containers.”  

These terms all describe the same article with the same design and performance

characteristics.  Notwithstanding the particular terminology used to describe the

merchandise, all merchandise that meets the definition set forth herein is

included within the scope of this investigation.

                                                      

15 See, e.g., S. Rep. No. 96‐249 at 90‐91 (1979).

16 See, e.g., Nippon, 19 CIT at 455; Torrington, 747 F. Supp. at 748‐49; see also S. Rep. No. 96‐

249 at 90‐91 (Congress has indicated that the like product standard should not be interpreted in “such a

narrow fashion as to permit minor differences in physical characteristics or uses to lead to the

conclusion that the product and article are not ‘like’ each other, nor should the definition of ‘like

product’ be interpreted in such a fashion as to prevent consideration of an industry adversely affected

by the imports under consideration.”).

17 See, e.g., USEC, Inc. v. United States, 34 Fed. App’x 725, 730 (Fed. Cir. 2002) (“The ITC may not

modify the class or kind of imported merchandise examined by Commerce.”); Algoma Steel Corp. v.

United States, 688 F. Supp. 639, 644 (Ct. Int’l Trade 1988), aff’d, 865 F.3d 240 (Fed. Cir.), cert. denied,

492 U.S. 919 (1989).

18 Hosiden Corp. v. Advanced Display Mfrs., 85 F.3d 1561, 1568 (Fed. Cir. 1996) (the Commission

may find a single like product corresponding to several different classes or kinds defined by Commerce);

Cleo, 501 F.3d at 1298 n.1 (“Commerce’s {scope} finding does not control the Commission’s {like

product} determination.”); Torrington, 747 F. Supp. at 748‐52 (affirming the Commission’s

determination defining six like products in investigations where Commerce found five classes or kinds).

19 See, e.g., Pure Magnesium from China and Israel, Inv. Nos. 701‐TA‐403 and 731‐TA‐895‐96

(Final), USITC Pub. 3467 at 8 n.34 (Nov. 2001); Torrington, 747 F. Supp.  at 748‐49 (holding that the

Commission is not legally required to limit the domestic like product to the product advocated by the

petitioner, co‐extensive with the scope).
7

Domestic containers generally meet the characteristics for closed van containers

for domestic intermodal service as described in the American Association of

Railroads (AAR) Manual of Standards and Recommended Practices Intermodal

Equipment Manual Closed Van Containers for Domestic Intermodal Service

Specification M 930 Adopted: 1972; Last Revised 2013 (AAR Specifications) for

53‐foot and 53‐foot high cube containers.  The AAR Specifications generally

define design, performance, and testing requirements for closed van containers,

but are not dispositive for purposes of defining subject merchandise within this

scope definition.  Containers which may not fall precisely within the AAR

Specifications or any successor equivalent specifications are included within the

scope definition of the subject merchandise if they have the exterior dimensions

referenced below, are suitable for use in intermodal transportation, are capable

of and suitable for double‐stacking in intermodal transportation, and otherwise

meet the scope definition for the subject merchandise.

Domestic containers have the following actual exterior dimensions:  an exterior

length exceeding 14.63 meters (48 feet) but not exceeding 16.154 meters (53

feet); an exterior width of between 2.438 meters and 2.60 meters (between 8

feet and 8 feet 6 3/8 inches); and an exterior height of between 2.438 meters

and 2.908 meters (between 8 feet and 9 feet 6 1⁄2 inches), all subject to

tolerances as allowed by the AAR Specifications.  In addition to two frames (one

at either end of the container), the domestic containers within the scope

definition have two stacking frames located equidistant from each end of the

container, as required by the AAR Specifications.  The stacking frames have four

upper handling fittings and four bottom dual aperture handling fittings, placed at

the respective corners of the stacking frames.  Domestic containers also have

two forward facing fittings at the front lower corners and two downward facing

fittings at the rear lower corners of the container to facilitate chassis interface.

All domestic containers as described herein are included within this scope

definition, regardless of whether the merchandise enters the United States in a

final, assembled condition, or as an unassembled kit or substantially complete

domestic container which requires additional manipulation or processing after

entry into the United States to be made ready for use as a domestic container.20

                                                      

20 The scope specifically excludes the following items:  (1) refrigerated containers; (2) trailers,

where the cargo box and rear‐wheeled chassis are of integrated construction, and the cargo box of the

unit may not be separated from the chassis for further intermodal transport; (3) container chassis,

whether or not imported with domestic containers, but the domestic containers remain subject

merchandise, to the extent they meet the written description of the scope.  As Commerce further

explained, imports of the subject merchandise are provided for under subheading 8609.00.0000 of the

Harmonized Tariff Schedule of the United States (“HTSUS”).  Imports of the subject merchandise which

meet the definition of and requirements for “instruments of international traffic” pursuant to

19 U.S.C. § 1322 and 19 C.F.R. § 10.41a may be classified under HTSUS heading 9803.00.50.  79 Fed. Reg.

(Continued...)
8

Although the scope refers to two primary types of containers (53‐foot domestic

containers with a minimum interior height of 107 inches and 53‐foot high cube domestic

containers with a minimum interior height of 109 3/8 inches), the only reported sales during

the POI consisted of 53‐foot high cube domestic containers, because market participants view

the shorter product that holds less cargo as obsolete.21

B. Analysis

The questionnaires in these investigations sought information about similarities and

differences between the group of containers described in the scope definition (certain domestic

containers) and 53‐foot trailers used to transport dry goods.  Ultimately, the parties agreed for

purposes of the preliminary determinations that the Commission should define the domestic

like product to be certain domestic containers.22  Based on the record, we define a single

domestic like product consisting of certain domestic containers but not trailers for the reasons

stated below.

Physical Characteristics and Uses.  Certain domestic containers are weatherproof cargo

boxes constructed from thin corrugated steel panels welded together.23  Shippers use these

containers primarily in intermodal surface transportation in North America, typically

                                                                                                                                                                              

(...Continued)

28764 (May 19, 2014) (initiation of AD investigation); 79 Fed. Reg. 28679 (May 19, 2014) (initiation of

CVD investigation); CR at I‐6 to I‐8; PR at I‐5 to I‐7.

21 CR at V‐5; PR at V‐3; Confer. Tr. at 52‐53 (Fenton), 147‐48 (Drella), 148 (Cerny).

22 Stoughton asks to define the domestic like product as certain domestic containers but not

trailers due to differences in their physical characteristics, the limited use of trailers for certain domestic

containers’ primary purpose in intermodal transit due to trailers’ inability to double‐stack, Stoughton’s

production of the two products in entirely different locations, and their price differential.  Petitions,

Vol. I at 11, 20‐25; Confer. Tr. at 34‐37 (Hoades); Petitioner’s Postconference Brief at 2‐4.  Respondents

do not contest Stoughton’s proposed domestic like product definition for purposes of the preliminary

phase of these investigations.  Confer. Tr. at 176‐77 (Morgan, Heffner); CIMC/Singamas Postconference

Brief at 16.  Likewise, no party argues in favor of defining the domestic like product broader than the

scope to include 20‐ and 40‐foot containers.  Whereas certain domestic containers are used in

intermodal transportation within North America, International Standards Organization (“ISO”) 20‐ and

40‐foot containers travel back and forth in international maritime trade to transport goods by vessel.  

Unlike ISO containers, certain domestic containers have greater capacity and connect more efficiently

with intermodal rail and chassis equipment.  Market participants viewed ISO containers differently than

certain domestic containers.  No U.S. firm is reported as manufacturing domestic containers in lengths

of other than 53 feet.  Petitions, Vol. I at 5 n.5, 21, 22 n.29; Confer. Tr. at 189‐93 (Drella, Delozier, Dean,

Cerny); CIMC/Singamas Postconference Brief at 1‐2.  For these reasons, we do not include 20‐ and 40‐

foot containers in the domestic like product definition.

23 Petitions, Vol. I at 7‐8, 20‐21; Confer. Tr. at 35‐36 (Wahlin), 77 (Fenton); Petitioner’s

Postconference Brief, Exhibit 44 (Differences of Std. Trailer vs. Chassis/Container Combination and

accompanying diagrams).
9

transporting them from a port, manufacturing facility, or distribution center to a rail yard where

they are double‐stacked on rail cars for use as containers on flat cars (“COFC”), placed on a

chassis at the other end of the rail route, and unloaded at the final or interim destination.24  

Special design features permit top lifting and double stacking the containers on rail cars and

mounting them on a separate chassis for road transportation.25

By comparison, trailers function as the rear portion of a motor vehicle and consist of a

mostly mechanically assembled cargo box made from thin aluminum or even thinner galvanized

steel or composite materials that is permanently integrated into an undercarriage to form a

“monocoque” structure that carries itself.26  Unlike the chassis that is used to carry certain

domestic containers on the road, trailers’ integrated undercarriage typically includes additional

features not found on certain domestic containers.27  Lighter weight than containers, trailers

are generally used in surface over‐the‐road and not intermodal transportation.28  Cargo may be

transported via trailer on flat car (“TOFC”), but without the stacking frames, fittings, and

castings found on certain domestic containers, trailers cannot be double‐stacked in rail cars,

limiting cargo volumes and increasing costs.29

Manufacturing Facilities, Production Processes, and Employees.  Of the approximately

two dozen U.S. firms producing trailers, only Stoughton reported producing certain domestic

                                                      

24 Petitions, Vol. I at 6, 20‐21; Confer. Tr. at 19 (Wahlin).

25 Petitions, Vol. I at 6‐8, 20‐21 & n.28; Confer. Tr. at 29, 32‐33, 35‐36 (Wahlin), 72, 77 (Fenton),

104 (Delozier), 122 (Dean); Petitioner’s Postconference Brief at Exhibit 44 (Differences of Std. Trailer vs.

Chassis/ Container Combination and accompanying diagrams); Supplemental Trailer Questionnaires at

Question I‐4 (collectively referring to certain domestic containers’ four top upper stacking frame

handling fittings and four bottom dual‐aperture stacking frame handling fittings that facilitate top‐lifting;

intermediate stack frames providing support for a double‐stacked configuration; a fore and aft tunnel

recess in the containers’ bottom that fits over the raised “gooseneck” in the front of a chassis; two

forward‐facing and two rear downward‐facing fittings at the corners to facilitate the chassis interface;

and a steel‐welded rear frame with aperture holes on the bottom plate to allow engagement to a

chassis twist lock securement device).

26 Petitions, Vol. I at 21 n.28; Confer. Tr. at 32 (Wahlin), 35‐36 (Hoades), 77‐78 (Fenton), 97

(Fenton); Petitioner’s Postconference Brief at Exhibit 44 (Differences of Std. Trailer vs. Chassis/Container

Combination and accompanying diagrams).

27 Confer. Tr. at 32 (Wahlin), 35 (Hoades), 77‐78 (Fenton), 195 (Delozier); Petitioner’s

Postconference Brief at Exhibit 44 (Differences of Std. Trailer vs. Chassis/Container Combination and

accompanying diagrams); Supplemental Trailer Questionnaires at Question I‐4 (collectively referring to,

inter alia, running gear with wheels and tires, brakes, an electrical system, lights, skirts for wind

deflection, a rear impact under‐ride guard to prevent other vehicles from traveling underneath a trailer

in case of impact, and a kingpin, which connects the trailer directly to the highway tractor).

28 Petitions, Vol. I at 21 n.28, 22; Supplemental Trailer Questionnaires at Question I‐4; Confer.

Tr. at 138‐42 (Dean, Delozier, Drella, Cerny).

29 Using certain domestic containers limits the loading and unloading of cargo, which remains in

the container throughout the intermodal move often until the ultimate destination where the cargo is

finally off‐loaded.  Petitions, Vol. I at 21, 23; Confer. Tr. at 32‐33 (Wahlin), 83‐85 (Fenton), 104

(Delozier);  J.B. Hunt’s Postconference Brief at 5; Supplemental Trailer Questionnaires at Question I‐4.
10

containers.30  Stoughton, the sole U.S. producer of certain domestic containers during the POI,

produces trailers and certain domestic containers at separate sites.31

Stoughton constructs certain domestic containers primarily from carbon steel parts of

varying strengths.32  The predominant means of attaching the various steel members to one

another is through the weld process.33  In contrast, cargo boxes for trailers are primarily

mechanically assembled (rather than welded) from different materials (aluminum, galvanized

steel, or composites), the undercarriage for trailers is permanently affixed to the cargo box, and

additional parts and processes are needed to provide finished trailers with features such as

brakes, lights, and electrical systems not found on certain domestic containers.34  Trailers do

not undergo production processes associated with stacking frames and other features specific

to certain domestic cargo containers.35

Since resuming operations in 2011, Stoughton has been able to use some of its

employees that manufacture trailers for its certain domestic container facility, but those

employees need additional welding, assembly, or industrial skill training.36

Channels of Distribution.  Stoughton sells certain domestic containers directly to its

customers, which are ***, but sells trailers both to a network of distributors and directly to

customers.37  U.S. producers of trailers reported shipping them ***.38  Railroads, among the

primary purchasers of certain domestic containers, typically do not purchase trailers, whereas

trucking companies and leasing companies that lease back to carriers purchase both certain

domestic containers and trailers.39

                                                      

30 CR at I‐19 & n.82; PR at I‐14 n.82.

31 Petitions, Vol. I at 23‐24; Confer. Tr. at 25‐26, 32 (Wahlin) (producing trailers in Stoughton and

Brodhead, Wisconsin but containers in Evansville, Wisconsin); Supplemental Trailer Questionnaires at

Question I‐4.

32 All or part of the subassemblies undergo weld finishing in a blast booth before entering a

paint booth for exterior and interior painting.  Stoughton installs wood flooring into the containers,

installs lock rods in the doors, attaches door seals to the perimeter of the door panel assembly, and

seals the door fasteners.  Petitions, Vol. I at 7‐8; Confer. Tr. at 36 (Hoades), 76‐78 (Fenton).

33 Petitions, Vol. I at 8; Petitioner’s Postconference Brief at 9‐10 at n.27 (noting that Stoughton

uses some mechanical fasteners in its certain domestic containers).

34 Like certain domestic containers, trailers have wood flooring and a rear door system

consisting of door panels, seals, hinges, and lock rods.  Petitions, Vol. I at 21 n.28; Confer. Tr. at 29, 32‐

33 )Wahlin), 35‐36 (Hoades), 76‐78, 97 (Fenton); Petitioner’s Postconference Brief at Exhibit 44

(Differences of Std. Trailer vs. Chassis/Container Combination and accompanying diagrams);

Supplemental Trailer Questionnaires at Question I‐4.

35 Petitions, Vol. I at 21, 23; Confer. Tr. at 32‐33 (Wahlin), 83‐84 (Fenton), 104 (Delozier);  J.B.

Hunt’s Postconference Brief at 5; Supplemental Trailer Questionnaires at Question I‐4.

36 Petitions, Vol. I at 23; Confer. Tr. at 96‐97 (Wahlin); Petitioner’s Postconference Brief at

Exhibit 16.

37 Confer. Tr. at 36 (Hoades).

38 CR at I‐22; PR at I‐16; Supplemental Trailer Questionnaires at Question I‐4.

39 Petitions, Vol. I at 23; Confer. Tr. at 59 (Wahlin); CR at II‐3 to II‐4; PR at II‐2.
11

Interchangeability.  Due to differences in their features, interchangeability among

certain domestic containers and trailers is limited.  Certain domestic containers require a

separate chassis on either end of an intermodal move, whereas trailers have an integrated

carriage that permits them to travel on the roads; likewise, certain domestic containers require

well cars during rail transit whereas trailers use spine cars.40  The parties agree that the choice

between trailers and certain domestic containers depends on factors such as routes, availability

of rail lines, distances, destinations, costs, delivery times, and availability of equipment.41  Even

when sold in overlapping channels of distribution, trailers and certain domestic containers may

serve different purposes.42  Certain domestic containers carry double the volume of cargo when

they are double‐stacked on rail cars, a feature unavailable from trailers.43  The ability to reduce

costs by double‐stacking certain domestic containers is meaningful, given that at least 90

percent of U.S. rail routes accommodate double‐stacked containers.44  Consequently, shippers

may use trailers for short‐ and medium‐range over‐the‐road transportation but opt for certain

domestic containers for longer intermodal routes.45  For intermodal moves over long distances,

with the longest portion of the movement typically on a rail car, certain domestic containers

are increasingly preferred and are most commonly used to take advantage of lower rail freight

costs and lower sensitivity to fuel cost spikes or shortages in truck drivers relative to over‐the‐

road transportation by trailers.46  Improved scheduling reliability for railroads also makes

certain domestic containers increasingly more attractive.47

Producer and Customer Perceptions.  As the only U.S. producer of certain domestic

containers, Stoughton perceives clear distinctions between certain domestic containers and

trailers and reports that it does not typically sell certain domestic containers to its trailer

purchasers or vice versa.48  The parties agree that most trailer purchasers use them for over‐

the‐road short hauls and not for intermodal transportation, so market participants do not view

trailers as substitutes for certain domestic containers.49  Representatives of purchasers which

                                                      

40 Petitions, Vol. I at 22; Confer. Tr. at 19 (Wahlin), 138‐43 (Delozier, Drella, Cerny).

41 Petitions, Vol. I at 22, 24, Exhibit I‐9; J.B. Hunt’s Postconference Brief at 4; Petitioner’s

Postconference Brief at Exhibit 34‐36; CR at II‐1; PR at II‐1.

42 Confer. Tr. at 194‐95 (Drella, Delozier, Cerny); Petitions, Vol. I at 24, Exhibit I‐6 to I‐8; Confer.

Tr. at 37 (Hoades); Petitioner’s Postconference Brief at Exhibit 43.

43 Petitions, Vol. I at 21, 23; Confer. Tr. at 33 (Wahlin), 35‐36 (Hoades).

44 Confer. Tr. at 182‐83 (Drella), 183‐84 (Cerny), 184 (Dean).

45 Petitions, Vol. I at 21‐23; Confer. Tr. at 120, 195‐96 (Cerny).

46 Petitions, Vol. I at 21‐23; Confer. Tr. at 19, 33 (Wahlin), 35‐36 (Hoades), 55 (Wahlin, Dougan),

120 (Cerny), 136‐37 (Drella), 138 (Dean), 138‐40 (Delozier), 141‐42 (Cerny), 151 (Drella), 153

(Whitehead); Petitioner’s Postconference Brief at Exhibits 34‐36, 44; J.B. Hunt’s Postconference Brief at

3‐4; CIMC/Singamas’ Postconference Brief at Exhibit 1 at 12‐18; Supplemental Trailer Questionnaires at

Question I‐4; U.S. Importer Questionnaires at Question V‐1; CR at II‐1; PR at II‐1.

47 Confer. Tr. at 153 (Whitehead); J.B. Hunt’s Postconference Brief at 4.

48 Petitions, Vol. I at 24‐25.

49 Petitions, Vol. I at 24; Confer. Tr. at 138 (Dean), 138‐39 (Delozier), 139‐41 (Drella), 140‐42

(Cerny), 195‐96 (Cerny); J.B. Hunt’s Postconference Brief at 3‐4.
12

buy both trailers and certain domestic containers testified that they purchase them for

different purposes and view their over‐the‐road trucking and intermodal divisions as separate

lines of business.50  The Intermodal Association of North America separately tracks monthly

movements of domestic containers and trailers.51

Price.  Stoughton argues that the substantial cost of the undercarriage causes trailers’

base price to be thousands of dollars higher than certain domestic containers.52  Stoughton’s

average unit values for certain domestic containers, which do not reflect the cost of any chassis,

ranged from $*** to $***, and average unit values reported by U.S. producers of 53‐foot

domestic dry trailers ranged from $*** to $***.53

Conclusion.  Differences in physical characteristics (including the inability to double‐

stack trailers) limit the interchangeability of certain domestic containers and trailers for the

same uses, particularly for the rail portion of intermodal transportation.  Despite some overlap

in channels of distribution for sales to trucking and leasing firms, these firms, Stoughton, and

other market participants view certain domestic containers and trailers as different products.  

Notwithstanding some overlap in production processes, employees, and raw materials, there

are a number of differences in raw materials and production processes and no overlap in the

manufacturing facilities used to produce certain domestic containers and trailers.  Prices of

trailers are also higher than certain domestic containers.  For these reasons, we define the

domestic like product as certain domestic containers, not including trailers.

IV. Whether the Actual or Potential Domestic Industry is Established54

A. Defining the Actual or Potential Domestic Industry

The domestic industry is defined as the domestic “producers as a whole of a domestic

like product, or those producers whose collective output of a domestic like product constitutes

a major proportion of the total domestic production of the product.”55  In defining the domestic

industry, the Commission’s general practice has been to include in the industry producers of all

domestic production of the like product, whether toll‐produced, captively consumed, or sold in

the domestic merchant market.  Based on our definition of the domestic like product, we define

the actual or potential domestic industry as all producers of certain domestic containers.  

Stoughton is the only firm known to have produced certain domestic containers in the United

States during the POI.56

                                                      

50 Confer. Tr. at 194‐95 (Delozier, Drella, Cerny).

51 Petitions, Vol. I at 24.

52 Confer. Tr. at 37 (Hoades).

53 CR at I‐23; PR at I‐16; Supplemental Trailer Questionnaires at Question I‐4.

54 We use the term “potential” because one of the issues in these investigations is whether the

domestic industry is in fact established.

55 19 U.S.C. § 1677(4)(A).

56 There are no related party issues in the preliminary phase of these investigations.  CR at III‐4;

PR at III‐2.  
13

B. Whether the Domestic Industry is Established

In its petitions and other submissions in these investigations, Stoughton primarily

argued that the establishment of a domestic industry was materially retarded by reason of

subject imports from China.57  The concept of material retardation of the establishment of a

domestic industry has surfaced only twice in Commission opinions since 1998,58 and the issue

has been posed in only approximately 17 cases in the Commission’s history, mostly in the mid‐ 

to late 1980s and early 1990s.

Under the statute, the Commission determines whether there is a reasonable indication

that “the establishment of an industry in the United States is materially retarded by reason of

imports of the subject merchandise ... .”59  The current language dates to the Trade Agreements

Act of 1979.  Neither the statute nor the legislative history provides much guidance on how the

Commission should apply this provision.

Historically, the Commission has not limited application of the material retardation

statute to domestic producers that have not yet engaged in U.S. production.  If there is or was

at least some domestic production,60 which is the case in these investigations, then the

                                                      

57 Petitions, Vol. I at 17‐20; Petitioner’s Postconference Brief at 15‐21, Exhibits 15‐16, 30‐33.

58 In Laminated Woven Sacks from China, Inv. Nos. 701‐TA‐450 and 731‐TA‐1122 (Preliminary),

USITC Pub. 3942 (Aug. 2007), the Commission initially found a reasonable indication that the domestic

industry was not established and that the establishment of a domestic industry was materially retarded

by reason of subject imports from China.  Based on the additional information available in the final

phase of its investigations, the Commission ultimately found the domestic industry was established and

that the domestic industry was materially injured by reason of subject imports from China.  Laminated

Woven Sacks, USITC Pub. 4025.

In Butter Cookies in Tins from Denmark, Inv. Nos. 701‐TA‐704 and 731‐TA‐780 (Preliminary),

USITC Pub. 3092 (Mar. 1998), petitioners did not raise the material retardation issue, and it was not an

issue for the Commission majority making negative preliminary determinations, given how they defined

the domestic like product and thus the corresponding domestic industry.  Id. at 5 (Commissioner Miller

defining domestic like product as all cookies in tins); id. at 32 (Commissioner Crawford defining domestic

like product as all cookies).  In her dissenting opinion, however, Commissioner Bragg found a reasonable

indication that the domestic industry producing butter cookies in tins was threatened with material

injury by subject imports from Denmark and considered as a condition of competition the recent (1994)

entry of two longstanding U.S. producers of cookies into high‐volume production of butter cookies in

tins.   59 19 U.S.C. §§ 1671b(a), 1673b(a).

60 Where domestic firms had not yet undertaken production, the Commission looked for an

indication that the producers had made a “substantial commitment” to commence production before

examining whether the industry’s establishment was materially retarded by subject imports.  See, e.g.,

Certain Commuter Airplanes from France and Italy, Inv. Nos. 701‐TA‐174 & 175 (Preliminary), USITC Pub.

1269 at 8 (Jul. 1982) (domestic producers had not yet commenced production but had made a

substantial commitment to do so); Motorcycle Batteries from Taiwan, Inv. No. 731‐TA‐42 (Final), USITC

Pub. 1228 (Oct. 1981) (finding U.S. firms did not take substantial steps or make an affirmative

commitment to produce 6‐volt motorcycle batteries); Thin Sheet Glass from Switzerland, Belgium, and

the Federal Republic of Germany, Inv. Nos. 731‐TA‐127 & 129 (Preliminary), USITC Pub. 1376 (May 1983)

(Continued...)
14

Commission has applied a two‐step framework in which it first determines whether the

domestic industry is established.61  If the domestic industry is not yet established, then the

Commission has determined in the framework’s second step whether the establishment of a

domestic industry is materially retarded by reason of subject imports.  If the industry is

established, then the Commission has instead examined whether the domestic industry is

materially injured or threatened with material injury by reason of subject imports.  As the

Commission has previously recognized, under the statute, material retardation and material

injury/threat thereof are mutually exclusive standards, meaning that if a domestic industry is

established, it no longer qualifies as a “nascent” industry, and the analysis instead turns on the

issues of material injury or threat thereof.62

In applying the first step of the framework to determine if a domestic industry is

established, the Commission in previous investigations has examined several or all of the

following criteria:  (1) the length of domestic production operations; (2) the characteristics of

domestic production; (3) the size of domestic operations; (4) whether the proposed domestic

industry has reached a reasonable financial “break‐even” point; and (5) whether the activity is

more in the nature of introducing a new product line by an already established business.63  The

Commission has made this determination on a case‐by‐case basis according to the record of

each investigation.64

Stoughton argues that it began production recently, produced limited quantities relative

to the market as a whole, but could not reach production goals due to subject imports.  For

these reasons, Stoughton argues that the domestic industry is not yet established.65  

                                                                                                                                                                              

(...Continued)

(not finding efforts to date demonstrated a substantial commitment to commence production of high‐

quality thin sheet glass because Jeanette’s marketing efforts were not very intensive, Jeanette had not

purchased testing equipment that would have allowed it to differentiate between regular and high‐

quality glass, and Jeanette had problems qualifying its product), aff’d, Jeanette Sheet Glass Corp. v.

United States, 607 F. Supp. 123, 131‐32 (Ct. Int’l Trade 1985) (affirming “substantial commitment” test

where domestic producers had not yet engaged in producing high‐quality thin sheet glass).

61 But see Certain High Information Content Flat Panel Displays and Subassemblies Thereof from

Japan, Inv. No. 731‐TA‐469 (Preliminary), USITC Pub. 2311 at 3 n.2 (Sept. 1990) (because it found a

reasonable indication of material injury, the Commission did not reach the material retardation issue).

62 19 U.S.C. §§ 1671b, 1673b; see, e.g., Laminated Woven Sacks (Final), USITC Pub. 4025 at 19;

Fresh Chilled Atlantic Salmon from Norway, Inv. Nos. 701‐TA‐302 and 731‐TA‐454 (Preliminary), USITC

Pub. 2272 at 15 n.39 (Apr. 1990); Pressure‐Sensitive PVC Battery Covers from West Germany, Inv. No.

731‐TA‐452 (Preliminary), USITC Pub. 2265 at 12 (Mar. 1990).

63 Laminated Woven Sacks (Final), USITC Pub. 4025 at 19 (applying this framework, but

recognizing that these factors are not mandated by the statute).

64 See, e.g., Laminated Woven Sacks (Final), USITC Pub. 4025 at 20, 30 (indicating that the

Commission accepted the framework applied in prior cases); High Information Content Flat Panel

Displays and Display Glass Therefor from Japan, Inv. No. 731‐TA‐469 (Final), USITC Pub. 2413 at 18‐19

(Aug. 1991).

65 Petitions, Vol. I at 17‐20; Petitioner’s Postconference Brief at 19‐20, Exhibits 15‐16, 30‐33.
15

Respondents accept Stoughton’s characterization of the U.S. industry as not established for

purposes of the preliminary phase of these investigations.66

We examine below the five factors the Commission has previously examined to

ascertain whether a domestic industry is established.  For purposes of these preliminary

determinations, we considered for each of these factors evidence pertinent to the POI, because

no party argued in favor of examining evidence pertinent to any earlier period.

1. The Length of Domestic Production Operations

The Commission has focused on when domestic producers began their U.S. production

of the domestic like product.  In general, where domestic producers had produced for fewer

than two to three years, the Commission has found this favored finding a nascent domestic

industry.67  Where some or all of the domestic producers had produced for longer periods of

time, then the Commission found this factor favored finding an established industry.68

                                                      

66 J.B. Hunt’s Postconference Brief at 13, 16, 27‐28; CIMC/Singamas Postconference Brief at 16.

67 See, e.g., Benzyl Paraben from Japan, Inv. No. 731‐TA‐462 (Final), USITC Pub. 2355 (Feb. 1991)

(firm produced for 15 months, shut down, began again, shut down less than a year later, and then

supplied customers out of inventory); Certain Dried Salted Codfish from Canada, Inv. No. 731‐TA‐199

(Final), USITC Pub. 1711 at 6 (Jul. 1985), aff’d, BMT Commodity Corp. v. United States, 667 F. Supp. 880

(Ct. Int’l Trade 1987), aff’d, 852 F.2d 1285 (Fed. Cir.), cert denied, 1009 U.S. 1120 (1988) (suspended

production after two years with intent to resume production); Certain Copier Toner from Japan, Inv. No.

731‐TA‐373 (Preliminary), USITC Pub. 1960 at 9‐10 (Mar. 1987) (domestic production began about three

years earlier).  But see Lime Oil from Peru, Inv. No. 303‐TA‐16 (Preliminary), USITC Pub. 1723 at 8 n.19

(Jul. 1985) (finding established industry based on definition of domestic like product and industry as

producers of both cold‐pressed and distilled lime oil, but noting that, had it defined industry as distilled

lime oil producers, it would have found the industry established, even though, inter alia, domestic

distilled lime oil production began about two years earlier).

68 See, e.g., Laminated Woven Sacks (Final), USITC Pub. 4025 at 20‐22 (one or more domestic

producers had supplied the major types of products to the U.S. market long enough to weigh in favor of

established industry); Wheel Inserts from Taiwan, Inv. No. 731‐TA‐271 (Preliminary), USITC Pub. 2824

(Oct.  1994) (steady production throughout the period of investigation by at least three producers and

since the late 1980s by at least two U.S. producers);  Certain Gene Amplification Thermal Cyclers and

Subassemblies Thereof from the United Kingdom, Inv. No. 731‐TA‐485 (Final), USITC Pub. 2412

(Aug. 1991) (domestic production for more than three years); Flat Panels, USITC Pub. 2413 at 18‐19

(domestic production began before the period of investigation); Tungsten Ore Concentrates from the

People’s Republic of China, Inv. No. 731‐TA‐497 (Preliminary), USITC Pub. 2367 at 18 n.49 (Mar. 1991)

(continuous production over a long period of time); Salmon, USITC Pub. 2272 at 16‐18 (domestic

producers had been engaging in activities leading to production for a number of years, and some had

recently produced the product); PVC Battery Covers, USITC Pub. 2265 at 12 (production began three to

four years prior to investigation); Fabric and Expanded Neoprene Laminate from Japan, Inv. No. 731‐TA‐

206 (Preliminary), USITC Pub. 1608 at 8 n.24 (Nov. 1984) (producing for several years).
16

Stoughton began producing certain domestic containers made of welded steel in 2011.69  

Because Stoughton has been producing such containers for a relatively limited period, this

factor weighs in favor of finding the domestic industry is not established.

2. The Nature of Domestic Production

In examining the characteristics of domestic production, the Commission has asked

whether domestic production has been “modest,” continuous, or more akin to start and stop.70  

In previous investigations, when domestic production was “modest” or domestic production

began but halted and domestic producers were not producing at the time of the Commission’s

vote, the Commission has concluded that it supported finding the domestic industry was not

established.71  Where domestic production was continuous or even continuous and growing,

the Commission has concluded that it supported finding an established domestic industry.72

Stoughton produced *** units in 2011, *** units in 2012, *** units in the first quarter of

2013, and nothing since then.73  Stoughton reported ***.74  Such intermittent production

operations favor finding the domestic industry is not established.

                                                      

69 CR at III‐3; PR at III‐2.

70 See, e.g., Laminated Woven Sacks (Final), USITC Pub. 4025 at 24 (considering the specific

circumstances of individual producers as well as the circumstances of domestic producers as a whole);

High Information Content Flat Panel Displays and Display Glass Therefor from Japan, Inv. No. 731‐TA‐469

(Final), USITC Pub. 2413 at 18‐19 (Aug. 1991) (conducting inquiry on an industry‐wide basis).

71 See, e.g., Benzyl Paraben, USITC Pub. 2355 at 9‐10 (petitioner produced for 15 months, shut

down production, resumed production but shut down less than a year later and supplied the U.S.

market out of inventory); Copier Toner, USITC Pub. 1960 at 9 n.24 (domestic production was “modest”);

Codfish, USITC Pub. 1711 at 4‐5 & n.8, aff’d, BMT, 667 F. Supp. 880, aff’d, 852 F.2d 1285, cert. denied,

1009 U.S. 1120 (domestic producer began production in late 1982 but suspended operations in

November 1984 with the intent to reopen the plant in summer 1985 pending conclusion of negotiations

with the FDIC concerning certain loans from an eventually bankrupt bank and the receipt of additional

financing from another source).

72 See, e.g., Laminated Woven Sacks (Final), USITC Pub. 4025 at 22‐24 (domestic producers as a

whole had been continuously supplying the U.S. market throughout the period of investigation and since

mid‐2003, even if some reported intermittent or suspended production operations); Wheel Inserts,

USITC Pub. 2824 (Oct. 1994) (steady production throughout the period of investigation by at least three

producers and since the late 1980s by at least two producers); Gene Amplification Thermal Cyclers,

USITC Pub. 2412 (steady and substantial increases in domestic production capacity and production); Flat

Panels, USITC Pub. 2413 at 18‐19 (steady rather than start‐up production); Salmon, USITC Pub. 2272 at

16‐18 (substantial U.S. shipments); PVC Battery Covers, USITC Pub. 2265 at 12 (production was

increasing).

73 CR/PR at Table III‐3.

74 CR/PR at Table III‐2; Confer. Tr. at 21 (Wahlin).
17

3. The Scale of Domestic Operations

The Commission has sometimes considered the scale of domestic operations, with

larger operation levels generally supporting a finding that the domestic industry was

established75 and lower operation levels sometimes suggesting the domestic industry was not

established.76  In one instance, the Commission found the domestic industry was established

where the domestic producers’ market share was “relatively stable.”77  As the Commission has

previously noted, depending on the facts, factors such as production as a share of the total

market, shipments as a share of the total market, capacity compared to the total market, or

even the share of the customer base to which domestic producers have made sales may yield

different results.  For example, domestic producers might be producing large quantities but

shipping little, shipping little relative to the total market but shipping at least some volume to

each of the major customers, or possessing large capacity relative to the total market but using

little of it.78

Stoughton produced *** domestic containers in 2011, *** units in 2011, and *** units

in 2013,79 and it operated at a capacity utilization of *** percent in 2011, *** percent in 2012,

and *** percent in 2013.80  Based on U.S. shipments of *** units in 2011, *** units in 2012, and

*** units in 2013,81 Stoughton’s share of apparent U.S. consumption was *** percent in 2011,

*** percent in 2012, and *** percent in 2013.82  Based on the relatively small scale of

Stoughton’s operations, this factor favors finding the domestic industry is not established.

                                                      

75 See, e.g., Gene Amplification Thermal Cyclers, USITC Pub. 2412 (domestic industry established

where, among other factors, the vast majority of the U.S. market was supplied by the domestic

industry); Certain All‐Terrain Vehicles from Japan, Inv. No. 731‐TA‐388 (Preliminary), USITC Pub. 2071 at

A‐15 (Mar. 1988) (industry established because, inter alia, domestic producers had achieved significant

and increasing U.S. market share).  But see Benzyl Paraben from Japan, USITC Pub. 2355 at 10 (industry

not established even though firm had been increasing its market share, not finding market share to be

particularly indicative of establishment given the small number of purchasers and findings on other

factors).

76 See, e.g., Copier Toner, USITC Pub. 1960 at 9 n.24 (not finding established industry where,

inter alia, domestic production was small relative to the market as a whole).  But see Flat Panels, USITC

Pub. 2413 at 18‐19 (finding established industry despite finding that domestic production accounted for

“at least some” if only a “small” share of total U.S. market); Salmon, USITC Pub. 2272 at 17 (finding

established industry despite low domestic market share).

77 See, e.g., Laminated Woven Sacks (Final), USITC Pub. 4025 at 25‐26 (finding relative capacity

to be relevant but not determinative and that this factor favored finding an established industry where

domestic producers clearly increased production capacity, production, and U.S. shipments); Wheel

Inserts, USITC Pub. 2824 (finding established industry where, inter alia, domestic producers had

relatively stable U.S. market share).

78 See, e.g., Laminated Woven Sacks (Final), USITC Pub. 4025 at 24‐25.

79 Petitions, Vol. I at 3; Confer. Tr. at 20 (Wahlin); CR/PR at Table III‐3.

80 CR/PR at Table III‐3.

81 CR/PR at Table III‐4.

82 CR/PR at Table IV‐3.
18

4. Whether the Proposed Domestic Industry Has

Reached a Reasonable Financial “Break‐Even” Point

In deciding whether the proposed domestic industry is already established, the

Commission has also examined whether the proposed domestic industry has reached a

reasonable financial “break‐even” point.  In some previous cases, the Commission examined

whether total revenues and total expenses are equal.  Where possible, the Commission has

calculated a break‐even point by dividing total fixed costs and expenses by the unit contribution

margin (which is equal to the unit sales price minus the unit variable cost).83  In cases where

domestic producers as a whole have not reached a reasonable break‐even point, the

Commission has generally found the domestic industry was not established.84  Where it has

found that domestic producers as a whole had reached a reasonable break‐even point, the

Commission has found this factor favored finding the domestic industry to be established.85  In

Laminated Woven Sacks, the Commission examined domestic producers’ plans, assumptions,

and expectations when they undertook their operations, and it also conducted a break‐even

analysis on a retrospective basis using its standard break‐even formula, the results of which

were consistent with some of the prospective analyses that individual domestic producers had

prepared.86

Based on the available information, Stoughton began considering resuming production

of containers after being contacted by purchasers seeking a domestic supplier in 2009.87  After

receiving a substantial order for certain domestic containers, Stoughton began transforming its

                                                      

83 See, e.g., Benzyl Paraben, USITC Pub. 2355 at 10.

84 See, e.g., Benzyl Paraben, USITC Pub. 2355 at 10 (industry not established where, inter alia,

firm did not reach reasonable break‐even point during the latest period for which the Commission had

data (interim 1990)); Codfish, USITC Pub. 1711 at 5, aff’d, BMT, 667 F. Supp. 880, aff’d, 852 F.2d 1285,

cert. denied, 1009 U.S. 1120 (industry not established, company did not reach break‐even point).

85 See, e.g., Wheel Inserts, USITC Pub. 2824 (industry established where, inter alia, producers as

a whole had passed the break‐even point and reached profitability during the period of investigation;

they were able to cover fixed and variable costs); Gene Amplification Thermal Cyclers, USITC Pub. 2412

(industry established where, inter alia, an overwhelming majority of domestic producers already had

reached a break‐even point); Salmon, USITC Pub. 2272 at 16‐18 (industry established where, inter alia,

by 1988 a portion of the domestic producers had achieved profitability and another firm showed

improvement from 1987 to 1988, even though there were no sustained profits for producers as a

whole).  But see, e.g., Flat Panels, USITC Pub. 2413 at 18‐19 (finding established industry without

explicitly conducting a break‐even analysis); PVC Battery Covers, USITC Pub. 2265 at 12 (finding

established industry without explicitly conducting a break‐even analysis).

86 See, e.g., Laminated Woven Sacks from China, Invs. Nos. 701‐TA‐450 and 731‐TA‐1122 (Final),

USITC Pub. 4025 at 26‐27 (Jul. 2008) (finding this factor suggested that the domestic industry was not

established where domestic producers had conducted market research, talked to prospective

customers, set goals, and developed strategies for entering the market but as a whole experienced

operating losses, albeit lower operating losses than reflected in the record of the preliminary phase of

the investigations).

87 CR at VI‐4 to VI‐5 & n.5; PR at VI‐2; Petitions, Vol. I at 27; Confer. Tr. at 30 (Fenton).
19

production facility.88  Regardless of whether Stoughton’s projections were reasonable, a fact

that the parties dispute,89 the firm has not achieved a reasonable break‐even point during the

POI.90  Thus, the available evidence regarding this factor appears to favor finding that the

domestic industry is not established.

5. Whether the Start‐up Production Is More in the Nature of the

Introduction of a New Product Line by an Already Established Business

In assessing whether a proposed domestic industry is already established, the

Commission has also examined whether the start‐up production is more in the nature of the

introduction of a new product line by an already established business.  The Commission’s

examination of this factor has focused on whether the introduction of this product was aided

by the domestic producers’ other existing products.  Where the Commission has found the

start‐up production to be akin to the introduction of a new product line by an already

established business, it has generally found the domestic industry was established.91  In some

                                                      

88 Stoughton disassembled its prior production line and had to rebuild by adding new equipment

and changing its production processes to reflect a new design and raw material changes; it also needed

to provide new training to develop the skills needed to manufacture a “vastly different product.”  

Confer. Tr. at 29‐31, 79‐80 (Fenton); Petitions, Vol. I at 27‐33, Exhibit I‐10 to I‐12; Petitioner’s

Postconference Brief at Exhibits 15‐16, 30‐32; CR at III‐3, III‐9 to III‐10, VI‐5 to VI‐6; PR at III‐2, III‐4 to III‐

5, VI‐2.

89 See, e.g., Petitioner’s Postconference Brief at 30‐33, Exhibits 15‐16, 30‐32; CIMC/Singamas

Postconference Brief at 14‐15, 18‐19, Confer. Tr. at 178 (Morgan).

90 CR at VI‐4 to VI‐5; PR at VI‐2.  Based on a standard break‐even formula (total fixed costs

divided by per‐unit sales price minus per‐unit variable costs), Stoughton’s break‐even volumes would be

***.  CR at VI‐5; PR at VI‐2.

91 See, e.g., Wheel Inserts, USITC Pub. 2824 (established industry where, inter alia, wheel inserts

were produced as just one of several product lines of established firms); Gene Amplification Thermal

Cyclers, USITC Pub. 2412 (established industry; this was a new product for some established firms but a

new product made by some newly formed firms); Battery PVC Covers, USITC Pub. 2265 at 13 (finding

pressure‐sensitive battery covers were merely a new product line of an established firm that had been

producing labels for 76 years); Lime Oil, USITC Pub. 1723 at 8 n.19 (noting in dicta that it would have

found distilled lime oil to be an established industry because, inter alia, “unlike a new entrant, petitioner

has been in the business of selling lime oil for years and could use existing customer contacts and

distribution infrastructure in introducing distilled lime oil.  Rather than establishing an industry,

petitioner was introducing a new product line which has established a stable presence in the market.”);

Neoprene Laminate, USITC Pub. 1608 at 8 nn.24‐26 (majority finding R‐131 neoprene merely constituted

a change in the product line of the established fabric and expanded neoprene laminate industry, but

Commissioner Stern finding that “{w}hether or not the company embarking upon production of the new

product is new or well‐established, the statute requires the Commission to define the industry according

to specific like products, not in the general business sense.”).  But see, e.g., Benzyl Paraben, USITC Pub.

2355 at 11 (even though petitioner was an established firm, its benzyl paraben operations did not

appear to have derived a benefit from its other arguably “established” operations); Copier Toner, USITC

Pub. 1960 at 9 n.24 (not discussing this factor but determining that the electrically resistive

(Continued...)
20

cases where, inter alia, the start‐up production was entirely by new firms that did not already

manufacture other products, the Commission has still found the domestic industry was

established.92  While this factor may not be dispositive on the issue of establishment, the

Commission has found that it raises considerations that at least help to put the inquiry into

context.  For example, to the extent that domestic producers already possess some of the

equipment, employees, expertise, distribution systems, customer bases, and/or other

components needed to produce and distribute the products and are able to leverage these

assets for purposes of their new operations, this factor would lend some support to a finding

that the domestic industry is established.93

Founded in 1961, Stoughton began as a manufacturer of truck bodies, then expanded its

production lines to include semitrailers, over‐the‐road vans, flatbed trailers, and chassis.94  

Stoughton appears to suggest that the firm benefitted from its prior containers operations

and/or its operations on other products when it reports that purchasers began approaching

Stoughton in 2009 in search of a U.S. supplier of certain domestic containers.95  In contrast, the

parties agree that Stoughton’s prior production operations are relatively distant in time from

and involved a different product (mechanically assembled aluminum containers) than its

current operations.96  Although the evidence is mixed on this issue, overall it appears to favor

finding the domestic industry is established.

                                                                                                                                                                              

(...Continued)

monocomponent toner (“ERMT”) industry was “nascent” even though the ERMT producers

manufactured other toners as well); Codfish, USITC Pub. 1711, aff’d, BMT, 667 F. Supp. 880, aff’d, 852

1285, cert. denied, 1009 U.S. 1120 (even though petitioner was also producing other dried salted fish

such as pollock or hake, that did not prevent finding the industry was not established).

92 See, e.g., Flat Panels, USITC Pub. 2413 at 18‐19 (finding established industry even though

most domestic producers were dedicated to manufacturing this product).

93 Laminated Woven Sacks (Final), USITC Pub. 4025 at 28‐29 (this factor favored finding

established industry where at least for some domestic producers, there was some overlap in the

production equipment and employees used to produce laminated woven sacks and other products, and

at least some domestic producers were able to leverage, at least to some degree, their existing

customer lists and distribution systems).

94 Petitions, Vol. I at 2; Confer. Tr. at 16 (reporting current production of over‐the‐road vans,

grain trailers, converter dollies, domestic dry containers, and chassis) (Wahlin).

95 Confer. Tr. at 29‐30 (Wahlin).

96 Stoughton switched its container production design and process from an aluminum

mechanically fastened method to a steel‐welded construction method, disassembled its prior

production line, had to rebuild by adding new equipment and changing its production processes to

reflect a new design and raw material changes, and continued to make engineering improvements

thereafter.  Confer. Tr. at 28‐32, 79‐80, 95‐97 (Fenton); Petitioners’ Postconference Brief at Exhibits 15‐

16; CR at VI‐5; PR at VI‐3 (noting that Stoughton made $*** in capital expenditures ***).  Stoughton

released many of the employees it previously engaged in manufacturing aluminum containers when it

ceased producing that product in 2006.  Since resuming operations in 2011, Stoughton has been able to

use some of its employees that manufacture trailers for its certain domestic container facility, but those

employees needed additional training in the welding, assembly, or industrial skills associated with “a

(Continued...)
21

6. Conclusion

The statute, legislative history, and case law provide little guidance regarding material

retardation issues and factors the Commission should consider when analyzing the

establishment of an industry.  Focusing solely on events since 2011,97 all but the fifth factor

pertaining to “new product line of an existing business” favor finding that the domestic industry

is not established, which is consistent with what the parties argued.  Based on the current

record, and absent any contrary argument, we find for purposes of these preliminary

determinations that the domestic industry is not established, although we intend to revisit this

issue in any final phase investigations.

V. Whether There is a Reasonable Indication that the Establishment of a

Domestic Industry Has Been Materially Retarded by Reason of Subject

Imports98

In the preliminary phase of antidumping and countervailing duty investigations, the

Commission determines whether there is a reasonable indication that the establishment of an

industry in the United States is materially retarded by reason of the imports under

investigation.99  In prior investigations where the Commission has determined that a domestic

industry was not established, the Commission then has examined whether the establishment of

the domestic industry was materially retarded by reason of subject imports.100  The Commission

                                                                                                                                                                              

(...Continued)

vastly different product,” certain domestic containers.  Confer. Tr. at 96‐97 (Wahlin); Petitioner’s

Postconference Brief at Exhibit 16.

97 In any final phase investigations, we will also consider any party arguments concerning the

relevance of production‐related activities prior to 2011.

98 Section 771(24) of the Tariff Act, which defines “negligibility,” provides that imports from a

subject country that are less than 3 percent of the volume of all such merchandise imported into the

United States in the most recent 12‐month period for which data are available that precedes the filing of

the petitions or self‐initiation, as the case may be, shall be deemed negligible.  19 U.S.C. § 1677(24)(A)(i).  

There were no reported imports of certain domestic containers from nonsubject countries during the

POI.  CR at IV‐1, VII‐8; PR at IV‐1, VII‐5; CR/PR at Table IV‐2; Confer. Tr. at 134‐35 (Morgan, Delozier,

Cerny, Drella, Dean); CIMC/Singamas Postconf. Brief at Exh. 1 at 11.  Because imports from China

accounted for 100 percent of total imports of certain domestic containers in the most recent period, CR

at IV‐6; PR at IV‐3; CR/PR at Table IV‐2, subject imports from China are not negligible.

99 19 U.S.C. §§ 1671b(a), 1673b(a).

100 See, e.g., Laminated Woven Sacks (Preliminary), USITC Pub. 3942 at 23‐32 (in preliminary

phase of investigations finding industry not yet established where several firms began producing

relatively recently, domestic producers as a whole had not achieved break‐even status based on a

retrospective analysis, even though domestic production and shipments were relatively small but not

insignificant, capacity was large relative  to entire market, and there was some overlap in employees,

production equipment, customers, and distribution systems between laminated woven sacks and other

products); Benzyl Paraben, USITC Pub. 2355 at 9, 14 (industry not yet established where domestic

(Continued...)
22

has previously stated that, because each attempt to establish a new industry is inherently

unique, it makes its determination of whether the establishment of an industry is materially

retarded on a case‐by‐case basis.101  The Commission has framed its inquiry as whether the

industry’s performance “reflects merely the normal start‐up condition of a company entering

an admittedly difficult market or, is the performance worse than what could reasonably be

expected ... .”102

The factors that the Commission has examined in assessing whether the establishment

of a domestic industry is materially retarded by reason of subject imports have included many

of the same factors it considers in its material injury determinations:  domestic production,

shipments, capacity utilization, inventories, financial condition, employment, projected

performance compared to actual performance, and other market conditions.103

A. Conditions of Competition and the Business Cycle

The following conditions of competition inform our analysis of whether there is a

reasonable indication that the establishment of a domestic industry is materially retarded by

reason of subject imports from China.

                                                                                                                                                                              

(...Continued)

producers had intermittent production) (affirmative material retardation case); Copier Toner, USITC Pub.

1960 at 9‐10 (industry not yet established where domestic production was modest) (negative material

retardation case); Codfish, USITC Pub. 1711 at 4, aff’d, BMT, 667 F. Supp. 880, aff’d, 852 F.2d 1285, cert.

denied, 1009 U.S. 1120 (industry not yet established where domestic producers had ceased production)

(affirmative material retardation case); Commuter Airplanes, USITC Pub. 1269 at 8 (domestic industry,

which had not yet begun production, was not established) (negative material retardation case).

101 See, e.g., Laminated Woven Sacks (Preliminary), USITC Pub. 3942 at 32; Codfish, USITC Pub.

1711 at 4, aff’d, BMT, 667 F. Supp. 880, aff’d, 852 F.2d 1285, cert. denied, 1009 U.S. 1120.

102 See, e.g., Laminated Woven Sacks (Preliminary), USITC Pub. 3942 at 32; Codfish, USITC Pub.

1711 at 5, aff’d, BMT, 667 F. Supp. 880, aff’d, 852 F.2d 1285, cert. denied, 1009 U.S. 1120.

103 See, e.g., Laminated Woven Sacks (Preliminary), USITC Pub. 3942 at 32; Benzyl Paraben,

USITC Pub. 2355 at 9, 14; Copier Toner, USITC Pub. 1960; Codfish, USITC Pub. 1711 at 4, aff’d, BMT, 667

F. Supp. 880, aff’d, 852 F.2d 1285, cert. denied, 1009 U.S. 1120; Commuter Airplanes, USITC Pub. 1269 at

8 (negative material retardation case) (finding any difficulties were not due to subject imports but rather

to petitioner’s failure to make sufficient marketing efforts such as providing detailed product

specifications to prospective customers, who were unwilling to proceed with financing negotiations, let

alone commit to purchase product).

Sometimes, the Commission has examined documents prepared by firms at their inception to

gauge whether they had achieved a reasonable level of operations.  See, e.g., Copier Toner, USITC Pub.

1960 at 9‐10 (negative material retardation case) (finding better industry performance than what could

be expected (increasing U.S. shipments, stable production, steady financial performance improvements,

and signs of new entrants) and that the business plan for higher market share was unrealistic given the

absence at the time of an extensive national distribution network); Codfish, USITC Pub. 1711 at 4, aff’d,

BMT, 667 F. Supp. 880, aff’d, 852 F.2d 1285, cert. denied, 1009 U.S. 1120 (affirmative material

retardation case) (looking at a market and feasibility study prepared at inception of operations).
23

1. Demand Conditions

The parties generally agree about demand conditions.  In recent years, shippers of

goods within North America have gravitated away from over‐the‐road transportation to

intermodal transportation.104  Intermodal movement of dry goods using certain domestic

containers, where the longest portion of the movement occurs by rail, is increasingly favored

over truck‐only over‐the‐road transportation, because intermodal transportation is less

sensitive to fuel cost spikes, traffic conditions, and driver shortages, and railroads have

improved schedule reliability.105  In turn, containers are favored over trailers for the rail portion

of the transit to take advantage of the ability to double‐stack the containers on the flat car.106

Demand for certain domestic containers is derived from the demand for intermodal

shipping, which in turn is related to general economic activity, a transition from other forms of

shipping to intermodal for efficiency reasons, the need to replace retired containers reaching

their 15‐year average useful life, and capital availability to purchase containers.107  

Questionnaire respondents reported some seasonality in purchasing behavior.108

Only a very few purchasers account for the overwhelming majority of purchases in this

industry, and these firms are the end users of the certain domestic containers.109  The four

purchasers participating in the staff conference (J.B. Hunt, Hub Group, Schneider, and Norfolk

Southern) estimated they account for about 70 percent of purchases in the U.S. market based

on industry publications included in the petitions.110

                                                      

104 J.B. Hunt’s Postconference Brief at 3; Petitioner’s Postconference Brief at Exhibit 34‐38, 40‐

44; CR at II‐9; PR at II‐5 to II‐6.

105 J.B. Hunt’s Postconference Brief at 3‐4; Petitioner’s Postconference Brief at Exhibit 34‐38, 40‐

44; Confer. Tr. at 55 (Wahlin), 139, 151 (Drella); CR at II‐1, II‐9 to II‐10; PR at II‐1, II‐6.

106 Confer. Tr. at 104 (Delozier), 152‐53 (Whitehead); Petitioner’s Postconference Brief at Exhibit

34‐38, 40‐44.  During the 1990s and early 2000s, respondents reported that railroads had some surplus

capacity, so there was space for TOFCs, but as roads became more congested and railroads aggressively

took action to modify their routes to permit double‐stacked COFCs that could carry greater volumes of

cargo in a higher but shorter space, trailers became less attractive compared to certain domestic

containers.  Confer. Tr. at 138‐42, 182‐85 (Dean, Delozier, Drella, Cerny).

107 CR at II‐2, II‐10; PR at II‐1, II‐6.

108 Stoughton reported that demand for certain domestic containers usually *** from March to

October.  *** responding importers reported that containers are generally ordered for arrival in the

August to November timeframe corresponding with the peak shipping season.  CR at II‐10; PR at II‐6.

109 CIMC/Singamas Postconference Brief at 3, 12; CR at II‐1; PR at II‐1.

110 Confer. Tr. at 102 (Morgan); CIMC/Singamas Postconference Brief at 3‐4, 12‐13 (citing

Petitions, Vol. I at Exhibit I‐13).  The other leading purchasers are CSX Corporation (“CSX”); C.H.

Robinson; Swift Transportation, Inc.; and Union Pacific Railroad (“UPRR”).  Collectively, these eight

purchasers reportedly account for almost 95 percent of purchases in the U.S. market.  Confer. Tr. at 188‐

89 (Morgan, Cerny); Petitioner’s Postconference Brief at Exhibit 37; CIMC/Singamas Postconference

Brief at 12‐13, Response to Staff Question 12; CR at II‐1; PR at II‐1.
24

Most firms reported that demand for certain domestic containers fluctuated during the

POI.111  Apparent U.S. consumption declined from *** units in 2011 to *** units in 2012 and

then to *** units in 2013.112  Although there was some pent‐up demand that explained higher

purchase volumes at the beginning of the POI, the parties projected demand for certain

domestic containers would increase moderately.113

2. Supply Conditions

Except as noted, the parties also agree about many of the supply conditions.   

Before 2005, the U.S. market for 53‐foot intermodal dry goods containers was served

primarily by mechanically assembled lightweight aluminum plate intermodal containers,

predominantly supplied by U.S. producers.114  U.S. producers Stoughton and Wabash National

Corporation made some innovations to these products, with Wabash offering stackable

containers115 and both firms offering containers with a wider interior of more than 100 inches

during 2004 to 2005.116  In 2005, CIMC, Singamas, and Shanghai C & Jindo Container Co., Ltd.

(“Jindo”) introduced into the U.S. market light‐weight, fully welded steel containers made in

China that complied with exterior‐width restrictions, had greater interior widths due to thin but

durable walls, and could withstand double‐stacking on rail cars.  According to respondents,

these welded steel products imported from China provided a longer useful life with fewer

leakage problems and resultant damage claims than the then‐available mechanically assembled

containers whose holes from bolts and rivets provided water entry points over time.117

Stoughton idled its aluminum containers manufacturing facility in 2006 and shuttered it

in 2007 after finding its product was no longer competitive with the imported product from

                                                      

111 CR at II‐11; PR at II‐7; CR/PR at Table II‐1.

112 Apparent U.S. consumption of *** units during the first quarter of (“interim”) 2014 exceeded

the *** units during interim 2013.  CR/PR at Table IV‐3.

113 Confer. Tr. at 50 (Wahlin), 123‐24 (Dean), 135‐37 (Drella), 137‐38 (Delozier), 151 (Drella);

Petitioner’s Postconference Brief at 22, Exhibit 34‐38, 40‐44; CIMC/Singamas Postconference Brief at 13,

Response to Staff Question 12; CR at II‐1; PR at II‐1.

114 Confer. Tr. at 104 (Delozier); J.B. Hunt’s Postconference Brief at 4 (noting predominance

between 1993 and 1998 of U.S. manufacturers Stoughton, Pines Trailer Corporation, Monon Trailer

Corporation, Great Dane Trailers, and Hyundai Translead).

115 Between 2000 and 2004, Wabash sold mechanically assembled DuraPlate containers

manufactured from two thin layers of steel plate that were bonded to a middle core of formed plastic to

form a product that was heavier and smaller than the aluminum containers but that could be double‐

stacked on a rail well car.  J.B. Hunt’s Postconference Brief at 5; Confer. Tr. at 92 (Wahlin) (noting that to

his knowledge, Wabash was not involved in manufacturing containers for intermodal transport), 105

(Delozier).  Hub also reported that in the early 2000s, it closely monitored Pacer Stacktrain’s efforts to

develop a domestic light‐weight steel container.  Confer. Tr. at 112 (Cerny).   116 Confer. Tr. at 181 (Cerny).

117 J.B. Hunt’s Postconference Brief at 4‐6; CIMC/Singamas Postconference Brief at 2‐3; Confer.

Tr. at 104‐09 (Delozier), 112‐116 (Cerny), 122‐25 (Dean), 126‐29 (Drella), 167‐68 (Drella), 168 (Delozier).
25

China.  Other U.S. firms also stopped manufacturing domestic containers at some point prior to

2009.118

In 2009, U.S. rail and truck carriers and lessees approached Stoughton in search of a U.S.

source of domestic containers.119  After reconfiguring its plant,120 Stoughton began production

of welded steel certain domestic containers in 2011, and it is the only U.S. firm that

manufactured certain domestic containers during the POI.121

Another U.S. firm, American Intermodal Container Manufacturing (“AICM”), reportedly

intends to enter the U.S. market with a fully welded certain domestic container and expects

***.122  According to respondents, AICM intends to sell fully welded certain domestic containers

in the United States, and some purchasers have already been in contact with AICM.123

The parties agree that there are only two foreign suppliers of certain domestic

containers (CIMC and Singamas), both of which are based in China, and no producers in any

nonsubject country.124  The two producers, CIMC and Singamas, accounted for *** and ***

percent of certain domestic containers production in China, respectively, during the POI.125

3. Substitutability/Quality Issues126

Purchasers expect certain domestic containers to have an average lifespan of about 15

years.127  Whereas the parties agree that certain domestic containers made in the United States

and China are used for the same general purpose of intermodal transportation of dry cargo,

they disagree as to whether the products are substitutable.128  The record suggests that

                                                      

118 Petitions, Vol. I at 2‐3; Confer. Tr. at 20 (Wahlin), 115 (Cerny).  ***.  Wabash supplemental

trailer producer questionnaire response.

119 Confer. Tr. at 20 (Wahlin).

120 Confer. Tr. at 28‐32, 79‐80, 95‐97 (Fenton); Petitioner’s Postconference Brief at Exhibit 15;

CR at VI‐5; PR at VI‐2.

121 Confer. Tr. at 8, 88‐89 (Levin, Wahlin); Petitioner’s Postconference Brief at Exhibit 16.

122 Staff telephone interview with *** (May 15, 2014); CR at III‐4 to III‐6; PR at III‐2 to III‐3; J.B.

Hunt Postconference Brief at 11; Confer. Transcript at 88‐89 (Wahlin, Levin), 110‐11 (Delozier), 125

(Dean).

123 J.B. Hunt Postconference Brief at 11; Confer. Tr. at 110‐11 (Delozier), 125 (Dean).  We intend

to collect further information about AICM’s operations in any final phase of these investigations.

124 CIMC/Singamas Postconference Brief at 12; CR at VII‐8; PR at VII‐5; Confer. Tr. at 11‐12

(Morgan), 10 (Levin), 134‐35 (Morgan, Delozier, Cerny, Drella, Dean), 207 (Morgan).  The petitions

identified a third potential producer of certain domestic containers in China, but Jindo reportedly did

not produce domestic containers during the POI.  CR at VII‐3 n.3; PR at VII‐3 n.3; Confer. Tr. at 11‐12

(Morgan), 105 (Delozier).

125 CR/PR at Table VII‐1 (noting that the U.S. market accounted for *** percent of CIMC’s total

shipments compared to *** percent for Singamas).

126 Commissioners Broadbent and Kieff do not join this section or the remainder of these Views.

127 Petitions, Vol. I at 7; Confer. Tr. at 110 (Delozier), 124 (Dean).

128 Stoughton reported that certain domestic containers made in the United States and China

are *** interchangeable, whereas *** U.S. importers reported that these products are ***

(Continued...)
26

manufacturers in China and the United States produce certain domestic containers that meet

the Association of American Railroads standards, but the parties disagree about the significance

of product characteristics such as interior width dimensions and the method of assembly.  

These standards permit more than one interior dimension and do not specify the assembly

method, such as whether the container must be fully welded or may be assembled using

mechanical fasteners.129

During the POI, Stoughton produced and sold two generations of certain domestic

containers, both of which have an interior width of 99 inches and several points of connection

that are accomplished using mechanical fasteners.130  Specifically, in 2011, Stoughton

introduced its generation I certain domestic containers into the U.S. market after receiving a

substantial order for 1,525 units of the product from Norfolk Southern.131  Norfolk Southern

reported ultimately reducing the order to 200 units after Stoughton was unable to deliver the

required quantities on schedule and after Norfolk Southern discovered quality and design

issues with the side panels of the containers.132  Stoughton acknowledged that there were

design issues with the initial production, and repaired the containers by adding reinforcing

material.133  In its generation II certain domestic containers, Stoughton made engineering

improvements to the design in order to respond to issues associated with its generation I

certain domestic containers.134

For its part, Stoughton argues that its products are virtually identical to certain domestic

containers imported from China, and it reports that differences between the two products

other than price are *** significant.  Although Stoughton reports having the ability to

manufacture a product that is acceptable to purchasers, it claims that the steeply discounted

price of subject imports has deprived it of the opportunity to design, develop, and evolve a

quality product capable of commercial‐scale production.135

Responding purchasers assert that they would like to source certain domestic containers

from a U.S. supplier, but they argue that various non‐price reasons explain their preference for

                                                                                                                                                                              

(...Continued)

interchangeable and *** U.S. importer reported that they are “sometimes” interchangeable.  CR at II‐15;

PR at II‐9; CR/PR at Table II‐2.

129 E.g., Confer. Tr. at 46, 53‐54, 66‐67, 70‐71, 91‐92 (Fenton), 113, 118 (Cerny), 129 (Drella).   130 Confer. Tr. at 46‐47 (Fenton); Petitioner’s Postconference Brief at 13‐14.

131 Confer. Tr. at 31 (Fenton), 123 (Dean).

132 Confer. Tr. at 123‐24 (Dean) (noting the final delivery consisted of 199 units of Stoughton’s

generation I certain domestic containers and 1 unit of Stoughton’s generation II certain domestic

containers).

133 Confer. Tr. at 31 (Fenton), 124 (Dean).

134 In 2012, Stoughton supplied one generation II certain domestic container to Norfolk

Southern and ***.  CR at III‐8; PR at III‐4; Confer. Tr. at 31‐32 (Fenton), 123‐24 (Dean).

135 Confer. Tr. at 19, 22‐23 (Wahlin); Petitioner’s Postconference Brief at 5‐15; CR at II‐14; PR at

II‐8; CR/PR at Table II‐3.   
27

imported certain domestic containers from China.136  For example, purchasers state that they

prefer the fully welded steel containers from the producers in China over Stoughton’s product

that continues to use some mechanical fasteners.  Purchasers also argue that no U.S. producer

meets their requirements for commercial quantities and timely delivery of a fully welded

certain domestic container with an interior width greater than 100 inches and steel panels with

a corrugation depth of 30 millimeters.137  Moreover, they prefer the convenience of receiving

containers at a port, such as Los Angeles, which is already in their network, instead of retrieving

them from Stoughton’s plant in Wisconsin.  They further argue that purchasers of certain

domestic containers benefit from lower shipping costs when their containers are loaded with

third‐party merchandise during transit from China to the United States, a non‐price service that

Stoughton does not offer.138

Due to the nature of the arguments in this proceeding, we discuss below the criteria

respondents argue are important to purchasers and Stoughton’s response to these arguments.  

We intend to examine these issues further in any final phase of these investigations.

a. Methods of Fastening

Respondents argue that purchasers require fully welded certain domestic containers

that can withstand fifteen years of continuous compression tension associated with regular top

lifting, loading, and unloading from the tractor chassis and rail cars while also bearing the load

of other equipment sitting above and enduring the swaying, braking, and acceleration of the

rail cars and tractor chassis.  Based on their prior experience with mechanically fastened

aluminum containers, respondents argue that any mechanical fasteners in containers that are

lifted as many as nine times per month become loose over time, making mechanically

assembled containers less durable and leaky as holes associated with riveting grow larger.139  By

                                                      

136 *** responding importers reported that differences other than price between certain

domestic containers made in the United States and China were “always” significant, and they pointed to

factors such as quality and design, availability of fully welded steel containers, safety and maintenance

considerations, production capacity, service levels, ease of doing business, historical ability to adhere to

commitments, and differences in specifications.  *** U.S. importer reported that non‐price factors are

*** significant.  CR at II‐15 to II‐16; PR at II‐9; CR/PR at Table II‐3.

137 Confer. Tr. at 108, 110‐11 (Delozier) (noting that the firm purchases most of its trailers

domestically), 114 (Cerny), 122‐23 (Dean), 129‐30 (Drella); CIMC/Singamas Postconference Brief at 4, 11.    138 CIMC/ Singamas Postconference Brief at 24, Exhibit 1; Confer. Tr. at 118‐19 (Cerny), 154‐56

(Dean, Hagen, Delozier, Drella), 169‐70 (Dean), 172‐73 (Drella), 179‐80 (Dean).  In any final phase

investigations, we intend to seek further clarification about the practice of shipping the containers

loaded with third‐party merchandise and any effect on pricing.

139 Water seepage damages the contents of the container, makes customers unhappy, creates

claims for the container’s owners, causes the container to be taken out of service for repairs, and

shortens the container’s useful life.  Confer. Tr. at 105‐07 (Delozier), 117‐18, 121‐22 (Cerny), 124‐26

(Dean), 127 (Drella), 165‐69 (Drella, Delozier, Cerny), 173‐75 (Drella), 179‐82 (Cerny, Dean); J.B. Hunt’s

Postconference Brief at 11‐12, 16‐18; CIMC/Singamas Postconference Brief at 2‐3, 8‐9, 17, Exhibit 1.
28

comparison, because rivets and bolts are not needed for fully welded containers,140

respondents claim purchasers’ overall leakage claims and associated costs have declined

substantially after they transitioned from mechanically assembled aluminum containers to fully

welded certain domestic containers imported from China, despite the fact that their overall

container fleet has grown in this period.141  Notwithstanding the alleged advantages of welding,

respondents argue that Stoughton initially chose to introduce and continues to offer only

containers that contain some mechanical fasteners, even though Stoughton asserts that it has

the capability to produce a fully welded certain domestic container.142

Stoughton’s representative testified that the firm “has not produced a product at this

point that is fully welded.  There are several points of connection that are accomplished by

mechanical means rather than by welding.”143  Nonetheless, Stoughton considers its product to

be a welded steel container, because it has reduced the number of mechanical fasteners ***

compared to its prior aluminum containers.  Stoughton argues that some purchasers “care

more about this issue than others,” but it amounts to a “perception” problem because none of

the firms that stated at the conference that they required a fully welded container ever

purchased (let alone field tested) Stoughton’s new design.144

b. Interior Width

Respondents argue that purchasers want an interior width of 100 3/8 inches and that

manufacturers in China have produced certain domestic containers that comply with

regulations limiting the exterior width of certain domestic containers but that achieve a larger

interior width using thinner walls.  The advantage of the incremental space is that shippers can

arrange one of two rows of pallets inside the container in a pinwheel fashion instead of in two

uniform rows of 11 pallets, thereby fitting 25 instead of 22 pallets in the container and

effectively giving the customer the cost savings of one free load every seventh container.145  

According to respondents, Stoughton’s certain domestic containers have an interior width of 99

inches, which does not accommodate such pinwheeling.146

                                                      

140 Respondents argue that repairing mechanically assembled fasteners involves replacing an

entire panel, whereas repairing a welded container simply involves welding the damaged area.  Confer.

Tr. at 105‐07 (Delozier), Slide 1 (illustrating mechanical fasteners versus welded seams), 117‐18, 121‐22

(Cerny), 124‐26 (Dean), 127 (Drella), 165‐69 (Drella, Delozier, Cerny), 173‐75 (Drella), 179‐82 (Cerny,

Dean); J.B. Hunt’s Postconference Brief at 11‐12, 16‐18; CIMC/Singamas Postconference Brief at 2‐3, 8‐9,

17, Exhibit 1.

141 J.B. Hunt’s Postconference Brief at 6‐11; Confer. Tr. at 107‐09 (Delozier); CIMC/Singamas

Postconference Brief at 9‐11.

142 J.B. Hunt’s Postconference Brief at 9; CIMC/Singamas Postconference Brief at 6‐7, 10‐11.

143 Confer. Tr. at 46‐47 (Fenton).

144 Confer. Tr. at 70‐71 (Fenton); Petitioner’s Postconference Brief at 9‐15, Exhibit 2‐14.

145 J.B. Hunt’s Postconference Brief at 6, 12‐13, 18, Exhibit 2 (showing pinwheeling

configuration); Confer. Tr. at 107‐08 (Delozier), 127‐28 (Drella), Slide 4 (showing pinwheeling

configuration); CIMC/Singamas Postconference Brief at 3, 18.

146 Confer. Tr. at 107‐08 (Delozier); CIMC/Singamas Postconference Brief at 18.
29

Stoughton agrees that the availability of greater‐width containers is important to some

customers.147  Whereas Stoughton previously manufactured containers with a wider interior

and has designed a wider‐interior steel certain domestic container, it acknowledges that to

date, it has not produced a welded steel certain domestic container with an interior width of

over 100 inches.148

4. Other

Raw materials account for approximately *** of the cost of goods sold (“COGS”) to

manufacture certain domestic containers, with carbon steel accounting for the largest share of

all costs (*** percent)149 and wood flooring (*** percent), paint (*** percent), door assemblies

(*** percent), and other components (*** percent), accounting for the balance.150

According to questionnaire respondents, transaction prices for certain domestic

containers result from bid competition or direct quotations to end users.  *** U.S. importers

that are end users (***) reported using a bidding process for *** of their purchases, whereas

U.S. importer *** reported that it does not use a bidding process for its purchases.  Of the ***

end users that were not importers of record (***), *** reported that they use a bid process for

their purchases.151  When issuing requests for quotations (“RFQs”), end users sometimes

differentiate between loaded (i.e., laden) and empty containers when purchasing from

manufacturers in China.152  Those ***.153

                                                      

147 Confer. Tr. at 47 (Fenton).

148 Confer. Tr. at 47, 66‐69, 88 (Fenton).

149 Rolled steel, steel I‐beams, and steel castings are among the various steel forms used to

manufacture certain domestic containers.  CR at V‐1; PR at V‐1.  Hot‐rolled steel prices declined on

average by 17 percent between January 1, 2011 and December 13, 2013 and increased by 4 percent in

the first quarter of 2014.  CR at V‐1; PR at V‐1; CR/PR at Figure V‐1.

150 CR at V‐1; PR at V‐1.

151 CR at V‐3; PR at V‐2.

152 In some instances, certain domestic containers are shipped from China loaded with

unrelated goods, and the revenue from providing that service reportedly offsets the shipping costs of

the containers for the importer.  CR at V‐3; PR at V‐2.

153 CR at V‐9; PR at V‐5.
30

B. Reasonable Indication that the Establishment of a Domestic Industry

is Materially Retarded by Reason of Subject Imports from China154

Stoughton manufactured small quantities of certain domestic containers during the POI

relative to both subject imports and the total U.S. market.  Stoughton produced *** certain

domestic containers in 2011, *** units in 2012, and *** units in 2013155 and operated at a

capacity utilization of *** percent in 2011, *** percent in 2012, and *** percent in 2013.156  

The firm reported ***.157  Stoughton reports that its *** investment in the dedicated

production facility in Evansville currently sits all but idle.158  The firm’s employment indicators

during 2011 to 2013 are generally consistent with its limited production operations during the

POI.159

Based on its U.S. shipments of *** units in 2011, *** units in 2012, and *** units in

2013,160 Stoughton’s share of apparent U.S. consumption was *** percent in 2011, *** percent

in 2012, and *** percent in 2013.161  Given the absence of any nonsubject imports, subject

imports from China accounted for the vast majority of the U.S. market during this period.162

Between 2011 and 2013, available data suggest that Stoughton was able to cover ***.163  

Thus, as discussed above, Stoughton did not reach a break‐even point during the POI.164  

Stoughton reported *** operating income in ***.165  On a per‐unit basis, Stoughton’s gross and

operating losses in 2012 were smaller than in 2011 as its per‐unit revenue increased by $***

                                                      

154 Commerce initiated an investigation based on an estimated antidumping duty margin of

84.07 percent for imports of certain domestic containers from China, and it initiated countervailing duty

investigations of two preferential loan and interest programs; three programs involving the government

provision of goods and services for less than adequate remuneration; two grant programs; and two tax

benefit programs.  79 Fed. Reg. 28674 (May 19, 2014); 79 Fed. Reg. 28679; CR at I‐5 to I‐6; PR at I‐4

to I‐5.

155 Petitions, Vol. I at 3; Confer. Tr. at 20 (Wahlin); CR/PR at Table III‐3.

156 CR/PR at Table III‐3.

157 CR/PR at Table III‐2.

158 Petitions, Vol. I at 3.

159 The firm reported relatively low and overall declining levels of production related workers,

total hours worked, and wages paid.  Unit labor costs ***.  CR/PR at Tables III‐4, III‐6; CR at III‐10 to III‐

11; PR at III‐4 to III‐5 (noting Stoughton’s explanation *** in interim 2014 than in interim 2013).

160 CR/PR at Table III‐4.  Stoughton *** exports during the POI.  CR/PR at Table III‐4.

161 CR/PR at Table IV‐3.

162 U.S. imports of certain domestic containers from China were *** units in 2011, *** units in

2012, *** units in 2013, *** units in interim 2013, and *** units in interim 2014.  CR/PR at Table IV‐3.

163 Between 2011 and 2013, Stoughton’s coverage of its fixed costs ***.  CR at VI‐4; PR at VI‐2.

164 Stoughton reported capital expenditures and research and development expenses ***.  

CR/PR at Table VI‐2.  As a consequence of subject imports from China, Stoughton reported ***, and it

anticipated ***.  CR at VI‐7; PR at VI‐3.

165 Stoughton’s operating *** were $*** in 2011, $*** in 2012, $*** in 2013, and $*** in

interim 2013, and its operating *** as a share of net sales was *** percent in 2011, *** percent in 2012,

*** percent in 2013, and *** percent in interim 2013.  CR at VI‐1; PR at VI‐1; CR/PR at Table VI‐1.
31

and its per‐unit costs declined by $***, but in 2013, Stoughton’s gross and operating losses

were greater than in 2012 as its per‐unit costs increased by $***, more than its per‐unit

revenue increase of $***.166

There are a limited number of purchasers of certain domestic containers, and they

typically place orders for large quantities of the product one to two times per year, rather than

on a monthly or other regular basis.167  Stoughton reported selling *** of its product on the

spot market and *** under short‐term contracts, whereas U.S. importers/end users reported

that *** percent of their purchases were through short‐term contracts.168   

The Commission collected quarterly data on the total quantity and value of certain

domestic containers shipped to unrelated U.S. customers during the POI.169  The small number

of sales in this industry and the limited quantities sold by the domestic producer complicate

price comparisons and the evaluation of pricing trends over time.170  Available data suggest that

prices of subject imports were lower than those of the domestic like product when there were

overlapping shipments in the same quarter.171  Moreover, overall subject import prices *** at

the end than at the beginning of the POI, while Stoughton obtained a *** price for its sales later

in the period than it had earlier in the POI.172  The limited available bid data also suggest that

***.173

Based on these data, Stoughton argues that producers in China undersold the domestic

like product in the U.S. market, used low prices to gain sales and revenue at its expense,

prevented it from selling sufficient volumes of certain domestic containers at adequate prices

to establish its operations, and lowered their prices over the course of the POI to keep out any

U.S. competitors.174  Stoughton cites to multiple conversations with purchasers where prices of

certain domestic containers were discussed and where purchasers told Stoughton its containers

were priced above the subject imports175 and implied that this was influencing their purchasing

                                                      

166 As noted above, raw material costs accounted for an average *** percent of Stoughton’s

total COGS, and its per‐unit raw material costs *** between 2011 and 2012 and then *** between 2012

and 2013.  CR at VI‐3; PR at VI‐1; CR/PR at Table VI‐1.

167 CR at V‐4; PR at V‐2.

168 CR at V‐4; PR at V‐2.

169 CR at V‐4; PR at V‐2.  As indicated earlier, questionnaire respondents only reported pricing

data for the high‐cube pricing product.  CR at V‐5; PR at V‐3; CR/PR at Table V‐1, Figure V‐2.

170 During the POI, Stoughton ***, as discussed in further detail below.  CR at III‐7 to III‐8; PR at

III‐4.

171 CR/PR at Tables V‐1 to V‐2, Figure V‐2.

172 CR/PR at Tables V‐1 to V‐2, Figure V‐2.  Whereas the questionnaire response from ***

suggests that price differentials between subject imports and the domestic like product, and not just

non‐price factors, did play a role in its purchasing behavior, ***).

173 CR/PR at Tables V‐4 to V‐5.  In any final phase of these investigations, we intend to seek bid

data for the entire POI, given the limited number of transactions in this industry.

174 Petitions, Vol. I at 26‐31; Confer. Tr. at 21‐22 (Wahlin); Petitioner’s Postconference Brief

at 23‐31 (arguing that ***).

175 Petitioner’s Postconference Brief at 29‐30.
32

decisions.  In contrast, respondents question the validity of any pricing comparisons between

certain domestic containers made in the United States and China because, unlike producers in

China, Stoughton does not manufacture a product meeting purchasers’ specifications, has

experienced quality and delivery problems, is a new and unproven entrant to the U.S. market,

and is incapable of supplying commercial quantities to meet purchasers’ needs.176  Respondents

point to recent increases in the price of subject imports as evidence that any decline in prices of

subject imports from China responded to other market forces and not competition with

Stoughton.177  We discuss these claims further below and conclude that there is a likelihood

that evidence will arise in any final phase of these investigations that could affect our resolution

of these competing arguments.

For example, we first examined the parties’ claims regarding the implications of

Stoughton’s use of some mechanical fasteners instead of fully welding its certain domestic

containers.  Due to concerns about leakage, some purchasers reported having informed

Stoughton that they would not accept certain domestic containers unless they were fully

welded.178  Norfolk Southern, which did ultimately obtain from Stoughton 199 units of its

generation I certain domestic containers in 2011 and 2012 and 1 unit of its generation II certain

domestic containers in 2012,179 ***.180  Stoughton suggests that the problems Norfolk Southern

identified with Stoughton’s generation I product related to side panel construction, not the use

of mechanical fasteners.181  Moreover, Stoughton argues that ***.182  Whereas Stoughton

reports that it has designed and is fully capable of manufacturing a fully welded container,183 it

suggests that there is “no inherent advantage” to fully welded products “from an engineering

or performance perspective.”184  We intend to explore this issue further in any final phase

investigations because the preceding passages suggest that the record on this issue, and

notably the conflicting evidence regarding some purchasers’ willingness to purchase non‐fully

welded certain domestic containers could be developed further.  In any final phase

investigations, we also intend to evaluate Stoughton’s claim that it incorporated some

                                                      

176 J.B. Hunt’s Postconference Brief at 7‐13, 15‐28; CIMC/Singamas Postconference Brief at 13,

17‐19, 21‐28; Confer. Tr. at 109‐10 (Delozier).

177 Confer. Tr. at 109‐10 (Delozier), 120 (Cerny), 127 (Drella); CIMC/Singamas Postconference

Brief at 21‐22.

178 J.B. Hunt’s Postconference Brief at 8, 12, 16‐18, 20 (J.B. Hunt); Confer. Tr. at 125 (Dean)

(Norfolk Southern), 206 (Morgan).

179 Confer. Tr. at 123‐24 (Dean).

180 Petitioner’s Postconference Brief at 12‐13, Exhibits 12‐13.

181 Petitioner’s Postconference Brief at 12.

182 Petitioner’s Postconference Brief at 9‐15, Exhibit 2‐14.

183 Confer. Tr. at 46‐47 (Fenton); Petitioner’s Postconference Brief at 13‐15, Exhibit 14.

184 Stoughton’s Postconference Brief at 14‐15, Exhibit 14; Confer. Tr. at 69‐71 (Fenton).  ***  CR

at III‐11; PR at III‐5.  ***.
33

mechanical assembly into its current products because low‐priced subject imports forced it to

“thrift” the design.185

With respect to purchasers’ claim that Stoughton has not produced certain domestic

containers with a wider interior, Stoughton asserts that it has a design for a wider interior steel

certain domestic container and previously manufactured a wider‐interior aluminum

container.186  According to respondents, Stoughton has not demonstrated that it will actually be

able to produce a container with an interior of a width that the market would accept.187  The

record also indicates, however, that ***.188  Additionally, Stoughton claims that when it ***.189  

In any final phase of these investigations, we will issue purchaser questionnaires which will

enable us to evaluate the importance of certain features, such as wider interiors, in purchasing

decisions.

Given the limited number of transactions involved in this industry, in any final phase

investigations we will ask industry participants to provide copies of their RFQs or other

contemporaneous documentation concerning their purchase specifications during the POI.  This

will help us to evaluate the parties’ arguments regarding the substitutability of certain domestic

containers manufactured in the United States and China and the extent to which purchasers

expect certain domestic containers to meet or exceed the Association of American Railroads

standards for features such as means of assembly and interior width.

We also intend to investigate the parties’ disagreements concerning other non‐price

factors, including quality, ability to supply commercial quantities, and timely delivery.  The

current record contains conflicting evidence about these issues.  For example, J.B. Hunt reports

that some of its concerns about buying from Stoughton are related to quality issues that arose

with its purchases of other products (chassis),190 whereas Norfolk Southern decided in 2011 to

award Stoughton with what respondents characterize as a “rare,” “practically unheard of,” and

“generous” order for a commercial quantity of 1,525 certain domestic containers based on its

longstanding history with Stoughton for other products.191

Stoughton acknowledges that its generation I container had some side panel design

issues, but argues that the firm worked to resolve them with Norfolk Southern through field

and factory repairs.192  Once these repairs occurred, Stoughton argues that there have been no

                                                      

185 Stoughton’s Postconference Brief at 14‐15, Exhibit 14 (showing cost savings); Confer. Tr. at

69‐71 (explaining that there are other methods of leak‐proofing containers, not just welding).

186 Confer. Tr. at 47, 66‐69, 88 (Fenton).

187 J.B. Hunt’s Postconference Brief at 6, 12, 22‐23; CIMC/Singamas Postconference Brief at 18.

188 Petitioner’s Postconference Brief at 9‐10, Exhibit 3.

189 Petitioner’s Postconference Brief at 10, Exhibits 5‐6.

190 J.B. Hunt’s Postconference Brief at 9‐10, 20; Confer. Tr. at 109 (Delozier).

191 Confer. Tr. at 124 (Dean); CIMC/Singamas Postconference Brief at 5, 11.

192 Specifically, Norfolk Southern initially discovered a “number of quality and design issues,”

including “caulking on the side panels and the irregularities due to forming or stamping, causing the side

panel to be distorted and difficult to fit and weld panels.”  After Stoughton repaired “side panel failures”

with its generation I containers, they weighed too much to be used as Norfolk Southern had intended.  

J.B. Hunt’s Postconference Brief at 7‐8, 21; Confer. Tr. at 123‐24 (Dean); CIMC/Singamas Postconference

(Continued...)
34

further quality issues, because even if the products were too heavy for Norfolk Southern’s

intended program, the products were put into service elsewhere.193  Stoughton argues that its

generation II container addressed the design concerns with its generation I container, and

notes that the Norfolk Southern witness testified that the firm has not had any problems with

the single generation II container it obtained from Stoughton.194  At the same time, the record

contains ***.195

Industry witnesses reported current quality concerns with Stoughton’s products beyond

means of assembly.196  Moreover, Hub *** suggests that Stoughton’s product may have met

AAR specifications but did not comport with Hub’s expectations for a product with adequate

strength comparable to the imported products Hub currently purchases.197

As support for their argument that Stoughton is unable to supply adequate quantities on

a timely basis, respondents point to evidence that Norfolk Southern had to reduce its order of

1,525 certain domestic containers to 1,025 containers and then to 200 units once it became

apparent that Stoughton would be unable to deliver the required quantities on time.198  Norfolk

Southern’s order ***.199  On the one hand, ***.200  On the other hand, Norfolk Southern has

not awarded Stoughton any purchases since then because it lacks “confidence in Stoughton’s

ability to produce and deliver per {Norfolk Southern’s} requirements.”201  As noted above,

however, ***.202

Respondents argue that other major purchasers (including at least J.B. Hunt, Hub Group,

Schneider, and ***) took notice and lost interest in buying these products from Stoughton after

hearing about the delivery and quality difficulties Norfolk Southern encountered with its order

from Stoughton, encountering problems in their own dealings with Stoughton, or viewing

                                                                                                                                                                              

(...Continued)

Brief at 5.  In any final phase of these investigations, we intend to confirm whether the cost of any such

repairs is reflected in our data.

193 Petitioner’s Postconference Brief at 6 & n.15.

194 Petitioner’s Postconference Brief at 6, 9; Confer. Tr. at 49 (Wahlin), 99‐100 (Fenton), 125,

144 (Dean); see also ***).

195 CR at II‐14, III‐8; PR at II‐8, III‐4; Petitioner’s Postconference Brief at Exhibit 4 (attaching an

e‐mail from ***).

196 Confer. Tr. at 109 (Delozier), 114, 116‐18 (Cerny), 124‐26, 169‐70 (Dean), 128‐30, 172‐74

(Drella) (discussing, inter alia, corrugation and structural strength concerns); CIMC/Singamas

Postconference Brief at 7‐9; J.B. Hunt’s Postconference Brief at 7‐13, 20‐21, 26.

197 Confer. Tr. at 118 (Cerny); CIMC/Singamas Postconference Brief at Exhibit 1 at 20‐71.

198 J.B. Hunt’s Postconference Brief at 7‐8, 21; CIMC/Singamas Postconference Brief at 5, 11‐12,

27; Confer. Tr. at 121‐24 (Dean).

199 Compare, e.g., CR/PR at Table C‐1.

200 J.B. Hunt’s Postconference Brief at 7 & n.27; Confer. Tr. at 124 (Dean).

201 Confer. Tr. at 124 (Dean).

202 CR/PR at Table V‐5.  The limited bid data available in the preliminary phase of these

investigations also show that ***, the fact that purchasers invited Stoughton to bid at all seems to

undermine some of their alleged concerns regarding non‐price factors that prevented Stoughton from

getting sales.
35

Stoughton’s products at trade shows.  Respondents argue that Stoughton continues to refuse to

supply a product meeting the requirements of purchasers accounting for at least 70 percent of

purchases in the U.S. market.203  Stoughton argues that purchasers have been unwilling to give

it the opportunity to compete for their business because of the widespread availability of low‐

priced subject imports, meaning that Stoughton has not had the opportunity to develop from a

new entrant into a supplier of field‐tested commercial quantities.204

As previously stated, in any final phase investigations, we will issue questionnaires to

purchasers seeking to generate additional information about purchasers’ decisions, which may

aid in our evaluation of the conflicting evidence on the record.  We will also seek information

***.  Because this case is being evaluated under a material retardation framework, we will

explore whether the reason for any inability by Stoughton to produce certain domestic

containers in commercial quantities is by reason of subject imports, as Stoughton contends, or

because of deficiencies in Stoughton’s product and services, as respondents contend.

Thus, the record in the preliminary phase of these investigations shows that subject

imports dominate the market and that low prices are a factor in purchasing decisions.  Indeed,

purchasers have told Stoughton on multiple occasions that its product is priced higher than

subject imports’.  Respondents have alleged multiple non‐price factors that have affected

Stoughton’s ability to obtain commercial volumes of sales during the POI.  With respect to at

least some of these factors, however, the record contains evidence that contradicts, or at least

does not comport with, respondents’ statements during this proceeding.  Consequently, we

cannot conclude that the record as a whole in the preliminary phase of these investigations

contains clear and convincing evidence that there is no reasonable indication that the

establishment of a domestic industry is materially retarded by reason of subject imports from

China or that there is no likelihood that evidence will arise in any final phase of these

investigations that would affect our resolution of these issues.

VI. Conclusion

For the reasons stated above, we determine that there is a reasonable indication that

the establishment of an industry in the United States is materially retarded by reason of subject

imports of certain domestic containers from China that are allegedly sold in the United States at

less than fair value and allegedly subsidized by the Government of China.

                                                      

203 J.B. Hunt’s Postconference Brief at 7‐11, 16‐26; CIMC/Singamas Postconference Brief at 3, 5‐

6, 11‐12, 18.

204 Petitioner’s Postconference Brief at 5‐15, Exhibits 1‐16.

37

Separate and Dissenting Views of Commissioners

Meredith M. Broadbent and F. Scott Kieff

Based on the record in the preliminary phase of these investigations, we find that there

is no reasonable indication that the establishment of a domestic industry is materially retarded

by reason of imports of 53‐foot domestic dry containers from China that are allegedly sold in

the United States at less than fair value and are allegedly subsidized by the Government of

China.  

In reaching these determinations, we join and adopt sections II through V.A.2 of the

Views of the Commission, defining the domestic like product as certain domestic containers and

finding the domestic industry is not established.

I. The Legal Standard for Preliminary Determinations

The legal standard for preliminary antidumping and countervailing duty determinations

requires the Commission to determine, based upon the information available at the time of the

preliminary determinations, whether there is a reasonable indication that a domestic industry is

materially injured or threatened with material injury, or that the establishment of an industry is

materially retarded, by reason of the allegedly unfairly traded imports.1 In applying this

standard, the Commission weighs the evidence before it and determines whether “(1) the

record as a whole contains clear and convincing evidence that there is no material injury or

threat of such injury or that the establishment of an industry is not materially retarded by

subject imports; and (2) no likelihood exists that contrary evidence will arise in a final

investigation.”2

The U.S. Court of Appeals for the Federal Circuit (“Federal Circuit”) has stated that the

purpose of preliminary determinations is to avoid the cost and disruption to trade caused by

unnecessary investigations and that the “reasonable indication” standard requires more than a

finding that there is a “possibility” of material injury.3 It also has noted that, in a preliminary

investigation, the “statute calls for a reasonable indication of injury, not a reasonable indication

of need for further inquiry.”4 Moreover, the U.S. Court of International Trade (“CIT”) has

reaffirmed that, in applying the reasonable indication “standard for making a preliminary

                                                      

     1 19 U.S.C. §§ 1671b(a), 1673b(a); see also, e.g., Co‐Steel Raritan, Inc. v. United States, 357 F.3d 1

1294 (Fed. Cir. 2004); Sensient Technologies Corp. v. United States, 28 CIT 1513 (2004); Committee for

Fair Coke Trade v. United States, 28 CIT 1140 (2004); Ranchers‐Cattlemen Action Legal Foundation v.

United States, 74 F. Supp.2d 1353, 1368‐69 (Ct. Int’l Trade 1999); Aristech Chem. Corp. v. United States,

20 CIT 353, 354‐55 (1996); American Lamb Co. v. United States, 785 F.2d 994, 1001‐04 (Fed. Cir. 1986).

     2 American Lamb Co., 785 F.2d at 1001; see also Texas Crushed Stone Co. v. United States, 35 F.3d

1535, 1543 (Fed. Cir. 1994).

     3 American Lamb, 785 F.2d at 1004.

     4 Texas Crushed Stone, 35 F. 3d at 1543.
38

determination regarding material injury or threat of material injury, the Commission may weigh

all evidence before it and resolve conflicts in the evidence.”5

We do not see a likelihood that any evidence the Commission would obtain in any final

phase of these investigations would change our determinations that there is no reasonable

indication that the establishment of a domestic industry is materially retarded by reason of

subject imports from China.

II. Substitutability/Quality Issues

In addition to the demand and supply conditions described in the Commission’s views,

we discuss below additional conditions of competition that inform our analysis of whether

there is a reasonable indication that the establishment of a domestic industry is materially

retarded by reason of subject imports from China.

Of the *** U.S. importers that responded to questions about the substitutability

between the subject imports and the domestic like product, most, ***, stated they were never

substitutable and the remaining minority, ***, said the products were sometimes substitutable

if the purchaser’s minimum quality standards were met. Despite the assertion by the U.S.

producer that the domestic like product and subject imports were always substitutable,6 the

record contains clear and convincing evidence that several distinctions between the subject

imports and the domestic like product seriously inhibit substitutability.  These distinctions

include differences in overall approach to container construction, differences in interior width,

and various overall container quality characteristics.

The subject imports from China are a fully welded container. The U.S.‐produced

container is a partially welded container that uses mechanical fasteners to attach the floor to

the three sides and for the rear door frame.7

  Purchasers that participated in this proceeding,

representing 70 percent of U.S. purchases,8 uniformly indicated a preference, if not a

requirement, for the fully welded container.9  Mechanical fasteners reportedly become loose

                                                      

     5 Ranchers‐Cattlemen, 74 F. Supp. 2d at 1368.

     6 CR at II‐15, PR at II‐9; CR/PR at Table II‐2. The Commission received seven U.S. importer

questionnaire responses.  One firm, ***, did not provide responses to substitutability and/quality

questions.  Two of the responding U.S. importers are also Chinese foreign producers/exporters CIMC

and Singamas. CR at I‐3, PR at I‐3.

     7 CR at II‐12‐13, PR at II‐8; J.B. Hunt’s Postconference Brief at 6, 9; CIMC/Singamas Postconference

Brief at 6‐7, 10‐11.

     8 Conference Tr. at 102 (Morgan); CIMC/Singamas Postconference Brief at 3‐4, 12‐13 (citing Petitions,

Vol. 1 at Exhibit I‐13). The four purchasers that provided testimony at the Staff Conference and/or

provided postconference briefs were Hub, J.B. Hunt, Norfolk Southern, and Schneider.

     9 Conference Tr. at 125 (Dean) (Norfolk Southern reported that it informed Stoughton that it was not

interested in buying mechanically fastened certain domestic containers, but that Stoughton has still not

offered a fully welded container); J.B. Hunt’s Postconference Brief at 20 (J.B. Hunt reports that it

repeatedly told Stoughton that it wanted a fully welded container); Conference Tr. at 118‐19 (Cerny)  

(Hub described Stoughton’s reliance on a partial use of mechanical fastening as problematic);

Conference Tr. at 129‐30 (Drella) (Schneider referred to its requirements for a fully welded container).
39

and holes associated with riveting become wider as containers are lifted, moved, and

compressed continuously over their 15 year expected lifespan. As leaks and holes begin to

appear, water seepage damages the contents of the container, creates claims for the

container’s owners, causes the container to be taken out of service for repairs, and ultimately

shortens the container’s useful life. In contrast, the purchasers assert that the fully welded

container does not require rivets and bolts, reducing the occurrence of water seepage and thus

reducing cargo water damage and costs.10 Although the petitioner did point out that it has a

design for, and the capability to build, a fully welded steel domestic container, it has not built

one that is fully welded.11

In addition to a fully welded steel construction, purchasers also indicated their

preference or requirement for domestic containers with an interior width of more than 100

inches.  The subject imports from China have interior widths of 100 3/8 inches, while the U.S.‐

produced container has an interior width of 99 inches.12  While only slightly larger, the interior

width of the Chinese containers allows for a pinwheel configuration of pallets that enables a

total of 25 pallets instead of 22 pallets to be fitted into the cargo space.  The purchasers, all of

which are in the business of providing logistical solutions for moving freight, state that the

ability to increase the number of pallets per container reduces costs for customers by allowing

for a more efficient use of the container volume.13  Again, although the petitioner stated it had

the capability of building steel domestic containers with greater than 99 inch interior widths, it

has not yet done so,14 and therefore is not able to meet the baseline specifications of any

purchaser that requires the larger interior width.

While not all purchasers specifically required both the wider interior widths and fully

welded construction of Chinese containers throughout the period of investigation, all

participating U.S. purchasers raised concerns with the overall quality and strength of the U.S.‐

produced domestic container.  Purchasers found quality and design issues such as caulking on

the side panels; irregularities due to forming or stamping that caused the side panel to be

distorted; side panel and door weakness; and various issues relating to the quality of welds,

                                                      

     10 J.B. Hunt Postconference Brief at 6, 11‐12, 16‐17; CIMC/Singamas Postconference Brief at 6‐7, 10‐

11; Conference Tr. at 105‐06 (Delozier), 117‐18, 121‐22 (Cerny), 124‐26 (Dean), 127 (Drella), 165‐69

(Drella, Delozier, Cerny), 173‐75 (Drella), 179‐82 (Cerny, Dean).

     11 See Petitioner Postconference Brief at 14, Exhibit 14 (stating that Stoughton has been capable of

producing a “100% Weld Design” product since 2011); Conference Tr. at 46‐47 (Fenton) (“Stoughton has

not produced a product at this point that is fully welded. There are several points of connection that are

accomplished by mechanical means rather than by welded. The predominant means of connection are

welds, but there are a portion that are not.”).

     12 CIMC/Singamas Postconference Brief at 2, Conference Tr. 107 (DeLozier); Conference Tr. at 47

(Fenton).

     13 CR at II‐13‐14; PR at II‐8; Conference Tr. at 108 (Delozier); J.B. Hunt Postconference Brief at 6, 12,

18; CIMC/Singamas Postconference Brief at 3, 18. See Conference Tr. at 128 (Drella) (“Another way of

thinking of this is with the addition of three more pallets in the 100‐inch wide box, every seventh load is

free for the customer”).

     14 Conference Tr. at 47 (Fenton), 66‐69 (Fenton), 88 (Fenton).
40

where used.15 Petitioner argues that purchasers’ perceptions of Stoughton’s domestic

containers were based on indirect evidence, such as purchasers’ understandings of the

experience of Norfolk Southern with the first generation model or past experiences with

Stoughton’s other products including aluminum domestic containers.16 However, the record

contains clear and convincing evidence provided by such U.S. purchasers that the reason why

they did not buy Stoughton’s merchandise was based in large part on their own direct

experiences either inspecting or testing the domestic product.17

For the reasons discussed above, we find clear and convincing evidence in the record

that the domestic like product and the subject imports have limited substitutability.

III. No Reasonable Indication of Material Retardation

For the reasons discussed below, we find that there is no reasonable indication that the

establishment of a domestic industry is materially retarded by reason of subject imports of

certain domestic containers from China.

The two established suppliers of domestic containers are the Chinese producers, CIMC

and Singamas.18 Together, these two firms accounted for almost all of U.S. market share in each

year during the period of investigation. Subject imports accounted for *** percent of apparent

U.S. consumption in 2011, *** percent in 2012, and *** percent in 2013.19 As apparent U.S.

consumption fell by *** percent over the period of investigation, subject imports declined from

*** units in 2011 to *** units in 2013, or by *** percent.20 Subject imports therefore

constituted the virtual entirety of the U.S. market.

The remaining *** containers sold into the U.S. market during the period of

investigation were sold by one domestic producer, Stoughton, equivalent to *** percent of

apparent U.S. consumption in 2011, *** percent in 2012, and *** percent in 2013.21 For the

                                                      

     15 Conference Tr. at 109 (Delozier), 118 (Cerny), and 123‐124 (Dean).   

     16 Conference Tr. at 202 (Levin); Petitioners Postconference Brief at 7.

     17 Conference Tr. at 109 (Delozier); Conference Tr. at 118 (Cerny); Conference Tr. at 128‐30 (Drella).

Petitioner further argues that Stoughton ***. Petitioner Postconference Brief at 10. *** Petitioner

Postconference Brief, exh. 4; CR at II‐14 n. 38, III‐8 n. 26; PR at II‐8 n. 38, III‐4 n. 26.  ***, Stoughton’s

experience with a very minor purchaser of domestic containers would not contradict the evidence

already provided by purchasers representing a far greater share of the market stating that Stoughton’s

merchandise was generally not acceptable.

     18 CR at I‐3, PR at I‐3.

     19 CR/PR at Table C‐1.  

     20 CR/PR at Table C‐1.

     21 CR/PR at Table C‐1. We note that in addition to the domestic industry’s small market share

throughout the period of investigation, Stoughton produced *** containers in 2011, *** containers in

2012, and *** containers in 2013. Its capacity utilization was *** percent in 2011, *** percent in 2012,

and *** percent in 2013. The number of production workers employed by the industry fell from *** in

2011 to *** in 2013, with hours worked falling by *** percent and wages paid falling by *** percent. Its

net sales were $*** in 2011, $*** in 2012, and $*** in 2013. It experienced operating margins of

negative *** percent in 2011, negative *** percent in 2012, and negative *** percent in 2013. CR/PR at
41

reasons discussed below, we find that the record provides clear and convincing evidence that

Stoughton was not able to establish itself within the U.S. market for several reasons unrelated

to subject import competition from China.

In the preliminary phase of these investigations, the record already contains

questionnaire data providing us with a representative picture of the U.S. market.  The only U.S.

firm that produced certain domestic containers submitted a questionnaire response, as did the

two Chinese producers accounting for all exports to the United States and reported production

in China. Importers accounting for a majority, approximately ***, of reported exports from

China also submitted questionnaire data.22  The Commission does not ordinarily issue

questionnaires to purchasers in preliminary phase investigations and did not do so here.  

Nevertheless, the record in this preliminary phase contains evidence reported by purchasers

accounting for 70 percent of U.S. purchases.23 Therefore, we have a higher percentage of

purchaser participation than the Commission receives in many final phase investigations, where

the Commission does normally issue questionnaires to purchasers. We therefore also have a

representative indication of how end users make purchasing decisions, because purchasers are

also generally the end users of domestic containers.24 All participating purchasers referred to

multiple issues that precluded them from granting initial or additional business to Stoughton.  

The experience of Norfolk Southern with Stoughton’s merchandise is illustrative, as

Norfolk Southern was the purchaser that gave Stoughton its first significant order which

ultimately accounted for a significant portion, ***, of Stoughton’s sales during the period of

investigation. Norfolk Southern, which sought a reliable U.S. source of supply in order to

alleviate a perceived supply shortage, ordered 1,525 containers from Stoughton in February

2011. However, Norfolk Southern had to reduce that volume to 1,025 containers after learning

that Stoughton would be unable to deliver the containers in the required quantities. While

inspecting production of the containers at Stoughton’s facility, Norfolk Southern recognized a

number of quality and design problems, and due to these issues and the initial delay, decided to

further reduce the order volume to 200 containers.25 After Norfolk Southern attempted to use

the relatively few (compared to the much larger volume it initially ordered) products that it did

ultimately purchase, it experienced side panel failures, requiring Stoughton to make repairs in

                                                                                                                                                                              

Table C‐1. Thus, the domestic industry performance and financial indicia reflect its inability to make

sufficient sales during the period of investigation.

     22 CR at I‐5 and V‐5, PR at I‐3‐4 and V‐3.

     23 Conference Tr. at 102 (Morgan); CIMC/Singamas Postconference Brief at 3‐4, 12‐13 (citing Petitions,

Vol. 1 at Exhibit I‐13). In addition, we have a response to a lost sales allegation provided by purchaser

*** that provides additional context for how that firm made purchasing decisions. CR at V‐15‐16, PR at

V‐6.

     24 CR at II‐1, PR at II‐1. The Commission collected pricing data from both the U.S. producer and U.S.

importers, and received usable information regarding *** bids that were issued by end users during the

period of investigation. CR at V‐5, 9‐11, PR at V‐3‐4. Purchasers’ testimony and briefs provided further

explanation of the purchases that occurred during the period of investigation.

     25 Petitioner Postconference Brief at 9; J.B. Hunt Postconference Brief at 7, 21; CIMC/Singamas

Postconference Brief at 5, 11‐12, 27; Conference Tr. at 121‐23 (Dean).
42

the field. Although these repairs were effective in fixing the side panels, they added reinforcing

material that made the domestic containers too heavy for their intended use.26

Thus, Stoughton’s sale to Norfolk Southern demonstrated that Stoughton was unable to

provide sufficient quantities of containers in a timely fashion, and once delivered, its containers

immediately needed to be repaired and were ultimately not able to be used for their intended

purpose. This inaugural sale in the market led to a perception among the general population of

purchasers that Stoughton was an unreliable supplier with a product that had shown

immediate deficiencies in the field.27 Acknowledging the sequence of events at Norfolk

Southern, Petitioner states that Stoughton was successful at repairing the containers in the

field and that it was able to improve upon this design within its second generation of containers

based on this experience.28 However, Stoughton’s reaction to this initial experience does not

mitigate evidence that its entry into the market drove a perception among purchasers that

Stoughton was not a reliable supplier of a quality product.

Petitioner further argues that other purchasers’ assertions with respect to quality are

merely a perception issue based on one purchaser’s experience with the first generation

product, as well as other experiences which Petitioner does not consider to be indicative of its

ability to provide an acceptable product.29 But as explained in detail above, the perception

accurately reflected the reality of the producer’s own established track record.  Such customer

perceptions are significant non‐price barriers that are the manufacturer’s to overcome.

In addition to the market perception of Stoughton’s product that was driven by the

Norfolk Southern sale, all other participating purchasers indicated having specific concerns

based on direct experiences with Stoughton’s containers, for both the first and second

generations of the product.  For example, J.B. Hunt observed quality issues with a 2011 trade

show prototype container produced by Stoughton. Considering these quality concerns, the

partial use of mechanical fasteners, and the smaller interior width, J.B. Hunt decided that it did

not make sense to pursue development efforts with Stoughton until it could redesign its

product and give J.B. Hunt the desired quality and interior dimensions.30   Similarly, Hub also

found quality issues with the second generation container.  At a trade show in 2012, Hub

looked at the Stoughton container and despite some apparent welding quality issues, was still

interested in a potential purchase.  However, test results provided by Stoughton caused Hub to

reconsider.  Although the container met the AAR M‐930 08 standard, Hub opted not to

purchase the container because the sidewall and door design tested significantly weaker and

therefore less safe and secure than Hub’s existing standard containers.31 Similarly, while

                                                      

     26 J.B. Hunt Postconference Brief at 7‐8, 21; CIMC/Singamas Postconference Brief at 5; Conference Tr.

at 123‐124 (Dean).  

     27 J.B. Hunt’s Postconference Brief at 9; CIMC/Singamas Postconference Brief at 5, 11; Conference Tr.

at 117 (Cerny) (“Hub was not interested in buying these first generation containers because of problems

that the Norfolk Southern Railroad experienced with them”).

     28 Petitioner Postconference Brief at 6; Conference Tr. at 49 (Wahlin).

     29 Conference Tr. at 202 (Levin); Petitioners Postconference Brief at 7.

     30 Conference Tr. at 109 (Delozier).

     31 Conference Tr. at 118 (Cerny).
43

Schneider testified that it considered testing Stoughton’s first and second generation

containers, it ultimately decided not to go through with these tests due to its own observations

of quality issues with a prototype at a trade show and because Stoughton did not meet

Schneider’s requirement for fully welded domestic containers with interior width of over 100

inches.32

Petitioner argues that purchasers’ statements regarding Stoughton’s inability to produce

an acceptable product are unwarranted given purchasers’ “unwillingness to work with the

domestic industry to evolve a product they wish to purchase.”33 Petitioner argues that it would

require a greater volume of sales in order to “evolve a product acceptable and useful to

purchasers of domestic containers.”34 For this reason, Petitioner acknowledges that because of

earlier market entry, “the Chinese container producers are generations ahead,”35 and states

that it was unrealistic for purchasers to expect Stoughton to enter the market with a product

identical to the Chinese domestic containers.36 It is not reasonable to assume, however, that

the market should have worked with Stoughton to develop its merchandise when the

incumbent suppliers’ merchandise was known to have higher quality and technical superiority.

Notwithstanding concerns over Stoughton’s quality, several U.S. purchasers invited

Stoughton to bid for their sales during the period of investigation. However, non‐price factors

either severely handicapped Stoughton’s bidding chances or outright disqualified it. ***.37

Norfolk Southern invited Stoughton to participate in its 2012 to 2014 bidding processes, but has

not made any purchases from Stoughton because of a ***.38 The fact that Stoughton, as one of

three potential suppliers, was invited to bid for certain purchases does not indicate that its

product was considered acceptable within the market, nor does it indicate that Stoughton was

                                                      

     32 J.B. Hunt’s Postconference Brief at 10‐11, 20; Conference Tr. at 128‐30 (Drella).

     33 Petitioner Postconference Brief at 9.

     34 Petitioner Postconference Brief at 5. Petitioner frames its own ability to develop an acceptable

product as requiring active and thorough participation of purchasers, including through the building of

prototypes, field testing, and purchaser feedback.

     35 Petitioner Postconference Brief at 6.

     36 Petitioner Postconference Brief at 7. Petitioner further outlines the iterative developmental process

that Chinese producers, particularly CIMC, went through in order to produce their superior product as

evidence that the domestic industry should have been afforded that same opportunity by purchasers.

Petitioner Postconference Brief at 8‐9. To the extent that the Chinese producers were able to go

through a sustained period of development supported by the business granted them by purchasers, they

did so because they entered the domestic containers market with the best product available that quickly

made competing container designs obsolete. The steel domestic containers that the Chinese introduced

to the market were lighter weight and larger than the DuraPlate models produced by Wabash, and are

fully welded, resulting in fewer leaks and reduced maintenance costs. CR at I‐12 and I‐16, PR at I‐9 and I‐

13; J.B. Hunt Postconference Brief at 5‐6. Evidence on the record does not indicate that Stoughton’s

entry into the market brought about a similar revolution to the market that would have encouraged

purchasers to grant it business despite quality and technical concerns.

     37 CR at V‐15‐16, PR at V‐6. Petitioner argues that ***. Petitioner Postconference Brief at 30‐31. We

note that ***.

     38 Conference Tr. at 124 (Dean); CR/PR at Table V‐5.
44

unable to win these bids due to price. Purchasers’ descriptions of their consideration of

Stoughton’s bids indicate the opposite: that Stoughton was ultimately considered to be too

risky a supplier of a product with perceived and evident quality problems that could, at best,

supply domestic containers only in small volumes.39

Purchasers indicated that price is important within the bidding process, but they also

consider product quality, ease of doing business, historical ability to adhere to commitments,

ability to meet delivery schedules, and baseline specifications.40 Thus, although the price data

on the record suggests that subject imports from China were priced lower than the small

volumes of domestic like product sold or offered into the market,41 the evidence provided by all

purchasers indicates that each had individual concerns with the quality and/or technical

specifications of Stoughton’s product and its ability to supply required quantities in a timely

fashion. We find that there is clear and convincing evidence providing a reasonable indication

that it was not the prices of subject imports from China, but rather the extensive quality issues

with Stoughton’s products, that were the cause of the domestic industry’s inability to gain sales

over the period of investigation.  

For the above reasons, we find that the record as a whole contains clear and convincing

evidence that the establishment of a domestic industry is not materially retarded by reason of

subject imports. In addition, based on the available information, we do not find a likelihood

that evidence leading to a contrary result will arise in any final phase of these investigations.

IV. Conclusion

Accordingly, we find no reasonable indication that the establishment of a domestic

industry is materially retarded by reason of subject imports of certain domestic containers from

China.

                                                      

     39 ***. CR/PR at Table V‐5.

     40 CR/PR at Table V‐3.

     41 CR at V‐8, PR at V‐4 (***); CR/PR at Table V‐4 and Table V‐5 (***).
I‐1

PART I: INTRODUCTION

BACKGROUND

These investigations result from a petitions filed with the U.S. Department of Commerce

(“Commerce”) and the U.S. International Trade Commission (“USITC” or “Commission”) by

Stoughton Trailers, LLC (“Stoughton”), Stoughton, Wisconsin, on April 23, 2014, alleging that

the establishment of a domestic industry is materially retarded and that an industry in the

United States is materially injured and threatened with material injury by reason of subsidized

and less‐than‐fair‐value (“LTFV”) imports of 53‐foot domestic dry containers (“certain domestic

containers”) 1 from China. The following tabulation provides information relating to the

background of these investigations.2 3

  

Effective date Action 

April 23, 2014 Petitions filed with Commerce and the Commission; 

institution of Commission investigations (79 FR 24005, 

April 29, 2014) 

May 14, 2014 Commission’s conference 

May 19, 2014 Commerce’s notice of initiation (79 FR 28674, 79 FR 

28679) 

June 6, 2014 Commission’s vote 

June 9, 2014 Commission’s determinations 

June 16, 2014 Commission’s views 

STATUTORY CRITERIA AND ORGANIZATION OF THE REPORT

Statutory criteria

Section 771(7)(B) of the Tariff Act of 1930 (the “Act”) (19 U.S.C. § 1677(7)(B)) provides

that in making its determinations of injury to an industry in the United States, the Commission‐‐ 

shall consider (I) the volume of imports of the subject merchandise, (II) the

effect of imports of that merchandise on prices in the United States for

domestic like products, and (III) the impact of imports of such

merchandise on domestic producers of domestic like products, but only in

the context of production operations within the United States; and. . .

                                                      

1 See the section entitled “The Subject Merchandise” in Part I of this report for a complete

description of the merchandise subject to these investigations. 2 Pertinent Federal Register notices are referenced in appendix A, and may be found at the

Commission’s website (www.usitc.gov).

3 A list of witnesses appearing at the conference is presented in app. B of this report.
I‐2

may consider such other economic factors as are relevant to the

determination regarding whether there is material injury by reason of

imports.

Section 771(7)(C) of the Act (19 U.S.C. § 1677(7)(C)) further provides that‐‐ 

In evaluating the volume of imports of merchandise, the Commission shall

consider whether the volume of imports of the merchandise, or any

increase in that volume, either in absolute terms or relative to production

or consumption in the United States is significant.

. . .

In evaluating the effect of imports of such merchandise on prices, the

Commission shall consider whether. . .(I) there has been significant price

underselling by the imported merchandise as compared with the price of

domestic like products of the United States, and (II) the effect of imports

of such merchandise otherwise depresses prices to a significant degree or

prevents price increases, which otherwise would have occurred, to a

significant degree.

. . .

In examining the impact required to be considered under subparagraph

(B)(i)(III), the Commission shall evaluate (within the context of the

business cycle and conditions of competition that are distinctive to the

affected industry) all relevant economic factors which have a bearing on

the state of the industry in the United States, including, but not limited to

. . . (I) actual and potential decline in output, sales, market share, profits,

productivity, return on investments, and utilization of capacity, (II) factors

affecting domestic prices, (III) actual and potential negative effects on

cash flow, inventories, employment, wages, growth, ability to raise

capital, and investment, (IV) actual and potential negative effects on the

existing development and production efforts of the domestic industry,

including efforts to develop a derivative or more advanced version of the

domestic like product, and (V) in {an antidumping investigation}, the

magnitude of the margin of dumping.

Organization of report

Part I of this report presents information on the subject merchandise, alleged subsidy

and dumping margins, and domestic like product. Part II of this report presents information on

conditions of competition and other relevant economic factors. Part III presents information on

the condition of the U.S. industry, including data on capacity, production, shipments,

inventories, and employment. Parts IV and V present the volume of subject imports and pricing

of domestic and imported products, respectively. Part VI presents information on the financial

experience of U.S. producers. Part VII presents the statutory requirements and information
I‐3

obtained for use in the Commission’s consideration of the question of threat of material injury

as well as information regarding nonsubject countries.

MARKET SUMMARY

Certain domestic cargo containers generally are used for the intermodal transport of

goods throughout North America via trucks and railcars. The sole U.S. producer of certain

domestic containers is Stoughton, while the only two producers of certain domestic containers

outside the United States are China International Marine Containers (Group), Ltd. (“CIMC”) and

Singamas Management Services, Ltd. (“Singamas”) of China. The leading U.S. importers of

certain domestic containers from China are CIMC, Hub City Terminals, Inc. (“Hub”), Singamas

North America, Inc. (“Singamas North America”), and Union Pacific Railroad Company (“UPRR”).

There were no reported imports from nonsubject countries from January 2011 through March

2014.4 U.S. purchasers of certain domestic containers are firms that use certain domestic

containers to transport goods in North America; leading purchasers include four firms which

attended the staff conference: J.B. Hunt Transport, Inc. (“J.B. Hunt”), Hub, Schneider Enterprise

Resources, LLC (“Schneider”), and Norfolk Southern Corp. (“Norfolk Southern”).5  

Apparent U.S. consumption of certain domestic containers totaled approximately ***

units valued at $*** in 2013. Currently, only Stoughton is known to have produced limited

quantities of certain domestic containers in the United States.6 7 U.S. producer Stoughton’s U.S.

shipments of certain domestic containers totaled *** units valued at $*** in 2013, and

accounted for *** percent of apparent U.S. consumption by quantity (*** percent by value).

U.S. imports from China totaled *** units valued at $*** in 2013 and accounted for ***

percent of apparent U.S. consumption by quantity (*** percent by value). There were no

reported imports from nonsubject countries from January 2011 through March 2014.

SUMMARY DATA AND DATA SOURCES

A summary of data collected in these investigations is presented in appendix C, table C‐

1. Except as noted, U.S. industry data are based on the questionnaire response of Stoughton

                                                      

4 Conference transcript, p. 134 (Morgan), p. 134 (DeLozier), p. 134 (Cerny), p. 135 (Drella), p. 135

(Dean). 5 These four firms represent approximately 70 percent of purchases in the U.S. market.  Conference

transcript, p. 12 (Morgan).  The other leading purchasers (CSX, C.H. Robinson, Swift, and UPRR) would

reportedly account for an additional 25 percent of purchases in the U.S. market. Conference transcript,

p. 188 (Morgan and Cerny); Postconference brief of CIMC and Singamas, p. 13.

6 Conference transcript, p. 21 (Wahlin). 7 At the preliminary staff conference, a startup U.S. manufacturer, American Intermodal Container

Manufacturing (“AICM”) was discussed.  According to testimony, American Intermodal expects to

release a prototype in June 2014.  Conference transcript, p. 14 (Morgan) and p. 126 (Dean). For

additional information please see Part III.
I‐4

which accounted for all known U.S. production of certain domestic containers during the period

of investigation. U.S. imports are based on the reported exports to the United States of certain

domestic containers by the only two known producers in China (CIMC and Singamas).8

PREVIOUS AND RELATED INVESTIGATIONS

There have been no previous antidumping or countervailing duty investigations on

certain domestic containers.

NATURE AND EXTENT OF ALLEGED SUBSIDIES AND SALES AT LTFV

Alleged subsidies

On May 19, 2014, Commerce published a notice in the Federal Register of the initiation

of its countervailing duty investigation on certain domestic containers from China.9 Commerce

identified the following government programs in China:

A. Preferential Loans and Interest Rates

1. Preferential Loans to SOEs

2. Export Buyer’s Credits and Export Seller’s Credits from the China ExIm

B. Government Provision of Goods and Services for Less than Adequate Remuneration

1. Provision of Electricity for Less than Adequate Remuneration

2. Provision of Hot‐Rolled Sheet and Plate for Less than Adequate

Remuneration

3. Provision of Steel I‐Beams for Less than Adequate Remuneration

C. Grants

1. “Famous Brands” Program

2. Other Government Grants to CIMC

D. Tax Benefit Programs

1. Two Free/Three Half Program for Foreign Invested Enterprises (FIEs)

2. Preferential Tax Programs for FIEs Recognized as HNTEs

                                                      

8 Conference transcript, pp. 11‐12 (Morgan) and p. 104 (DeLozier) (stating that there are only two

Chinese producers of certain domestic containers); Postconference brief CIMC and Singamas, p. 20.  The

petitions listed a third potential Chinese producer, Shanghai C & Jindo Container Co., Ltd. (“Jindo”).

However, Jindo is no longer in business.  Conference transcript pp. 11‐12 (Morgan) and p. 17 (Wahlin).

9 53‐Foot Domestic Dry Containers from the People’s Republic of China: Initiation of Countervailing

Duty Investigation, 79 FR 28679, May 19, 2014.
I‐5

Alleged sales at LTFV

On May 19, 2014, Commerce published a notice in the Federal Register of the initiation

of its antidumping duty investigation on certain domestic containers from China.10 Commerce

has initiated an antidumping duty investigation based on an estimated antidumping margin of

84.07 percent for product from China.

THE SUBJECT MERCHANDISE

Commerce’s scope

Commerce has defined the scope of these investigations as follows:11

The merchandise subject to investigation is closed (i.e., not open top) van

containers exceeding 14.63 meters (48 feet) but generally measuring

16.154 meters (53 feet) in exterior length, which are designed for the

intermodal transport12 of goods other than bulk liquids within North

America primarily by rail or by road vehicle, or by a combination of rail

and road vehicle (domestic containers). The merchandise is known in the

industry by varying terms including “53‐foot containers,” “53‐foot dry

containers,” “53‐foot domestic dry containers,” “domestic dry containers”

and “domestic containers.” These terms all describe the same article with

the same design and performance characteristics. Notwithstanding the

particular terminology used to describe the merchandise, all merchandise

that meets the definition set forth herein is included within the scope of

this investigation.

Domestic containers generally meet the characteristic for closed van

containers for domestic intermodal service as described in the American

Association of Railroads (AAR) Manual of Standards and Recommended

Practices Intermodal Equipment Manual Closed Van Containers for

Domestic Intermodal Service Specification M 930 Adopted: 1972; Last

Revised 2013 (AAR Specifications) for 53‐foot and 53‐foot high cube

containers. The AAR Specifications generally define design, performance

                                                      

10 53‐Foot Domestic Dry Containers from the People’s Republic of China: Initiation of Antidumping

Duty Investigation, 79 FR 28674, May 19, 2014. 11 53‐Foot Domestic Dry Containers from the People’s Republic of China: Initiation of Countervailing

Duty Investigation, 79 FR 28679, May 19, 2014 and 53‐Foot Domestic Dry Containers from the People’s

Republic of China: Initiation of Antidumping Duty Investigation, 79 FR 28674, May 19, 2014. 12 “Intermodal transport” refers to a movement of freight using more than one mode of

transportation, most commonly on a container chassis for on‐the‐road transportation and on a rail car

for rail transportation.
I‐6

and testing requirements for closed van containers, but are not dispositive

for purposes of defining subject merchandise within this scope definition.

Containers which may not fall precisely within the AAR Specifications or

any successor equivalent specifications are included within the scope

definition of the subject merchandise if they have the exterior dimensions

referenced below, are suitable for use in intermodal transportation, are

capable of and suitable for double‐stacking13 in intermodal

transportation, and otherwise meet the scope definition for the subject

merchandise.

Domestic containers have the following actual exterior dimensions: An

exterior length exceeding 14.63 meters (48 feet) but not exceeding 16.154

meters (53 feet); an exterior width of between 2.438 meters and 2.60

meters (between 8 feet and 8 feet 6 3/8 inches); and an exterior height of

between 2.438 meters and 2.908 meters (between 8 feet and 9 feet 6 1⁄2

inches), all subject to tolerances as allowed by the AAR Specifications. In

addition to two frames (one at either end of the container), the domestic

containers within the scope definition have two stacking frames located

equidistant from each end of the container, as required by the AAR

Specifications. The stacking frames have four upper handling fittings and

four bottom dual aperture handling fittings, placed at the respective

corners of the stacking frames. Domestic containers also have two

forward facing fittings at the front lower corners and two downward

facing fittings at the rear lower corners of the container to facilitate

chassis interface.  

All domestic containers as described herein are included within this scope

definition, regardless of whether the merchandise enters the United

States in a final, assembled condition, or as an unassembled kit or

substantially complete domestic container which requires additional

manipulation or processing after entry into the United States to be made

ready for use as a domestic container.

The scope of this investigation excludes the following items: (1)

Refrigerated containers; (2) trailers, where the cargo box and rear

wheeled chassis are of integrated construction, and the cargo box of the

unit may not be separated from the chassis for further intermodal

transport; (3) container chassis, whether or not imported with domestic

                                                      

13 Double‐stacking’’ refers to two levels of intermodal containers on a rail car, one on top of the

other.
I‐7

containers, but the domestic containers remain subject merchandise, to

the extent they meet the written description of the scope.

Imports of the subject merchandise are provided for under subheading

8609.00.0000 of the Harmonized Tariff Schedule of the United States

(HTSUS). Imports of the subject merchandise which meet the definition of

and requirements for “instruments of international traffic”’ pursuant to

19 U.S.C. § 1322 and 19 C.F.R. § 10.41a may be classified under

subheading 9803.00.50, HTSUS. While HTSUS subheadings are provided

for convenience and customs purposes, the written description of the

subject merchandise as set forth herein is dispositive.

Tariff treatment

53‐foot dry domestic containers are classified under HTS heading 8609.00.00. The

heading has no statistical reporting numbers, so no separate data on the subject containers are

available. HTS heading 8609 encompasses all containers (including containers for the transport

of fluids) specially designed and equipped for carriage by one or more modes of transport. The

current general rate of duty for this heading is free.

THE PRODUCT

Description and applications

The product scope includes closed van containers exceeding 48 feet, but generally

measuring 53 feet in length, which are designed to transport dry goods primarily by rail or by

road vehicles, or by a combination of both modes.14 Certain domestic containers are specifically

designed for the movement of freight by multiple means of transportation throughout North

America.15 Certain domestic containers are closed on all sides, including the top, and accessed

through lockable double doors at one end. The length is specified as 53 feet because this is the

longest length allowed by U.S. states for use on highways and roads.16 As a result, the domestic

containers are only used in the North American intermodal freight market.17 Domestic

containers are “dry” because the containers are not designed or intended for carrying liquids or

                                                      

14 Petition, p. 10.

15 Petition, p. 4.

16 U.S. states establish the maximum limit for the length of trailers in use on their roads. The Federal

length limits are minimums that states must allow on national network of highways. Petition, exh. I‐1.

U.S. Department of Transportation, Federal Highway Administration, “Federal Size Regulations for

Commercial Motor Vehicles,” FHWA‐HOP‐04‐022, EDL 14012, October 2004. 17 Petition, p. 4.
I‐8

goods requiring refrigeration.18 Domestic containers have various handlings and fittings so that

the containers can be lifted and then mounted on various platforms for movement, such as a

chassis,19 a railroad well car, or a ship.20 Figure I‐1 presents a 53‐foot domestic dry container.

Figure I-1 

Certain domestic containers: 53-foot domestic dry container 

Source: Petition, exh. I-13. 

Certain domestic containers are primarily used for transport by road or rail. The subject

product is either mounted on a chassis, to be towed by a truck on roads, or placed on a

specially designed rail well car, an operation known as container‐on‐flatcar (COFC).21 Some

domestic containers are also used in limited maritime transport, including barges that carry

freight to locations in the Caribbean.22 At a transfer point, containers are lifted and mounted

from the chassis onto the rail bed, or the reverse, and moved to their final destination.23

The American Association of Railroads (AAR) publishes Specification M‐930 for “closed

van containers for domestic intermodal service”24 that establishes uniform baseline

requirements for domestic containers so that they meet minimum safe standards for use and

can be used interchangeably on road and rail transport equipment without compatibility

problems. The Petitioner stated that domestic containers generally meet the AAR M‐930

                                                      

18 Petition, pp. 4‐7.   19 In the intermodal freight industry, the term chassis refers to a specific type of flat trailer designed

to connect with and secure domestic containers. Conference transcript, p. 173 (Drella).

20 Petition, p. 6; conference transcript, p. 87 (Fenton). 21 Petition, exh. SAD‐1. 22 Conference transcript, p. 87 (Fenton).

23 Petition, p. 6.

24 Petition, exh. I‐2. American Association of Railroads (AAR), “AAR Manual of Standards and

Recommended Practices: Intermodal Equipment Manual,” Specification M‐930, Adopted 1972, last

revised 2013.
I‐9

standards for closed van containers for domestic intermodal service.25 AAR M‐930 defines the

requirements for exterior and interior dimensions; handling fittings; gooseneck tunnel

dimensions; maximum gross weight ratings; special features; marking, identification, and

coating; and design requirements for dynamic load factors and specific parts of the container.26

AAR M‐930 also defines tests that the container must pass for lifting, front wall strength, rear

wall strength, side wall strength, roof strength, floor strength, racking, and weatherproofness.27

AAR M‐930 defines the performance criteria for a container, but not the material or assembly

method.28 Each purchaser may establish additional and unique requirements and specifications,

therefore, certain domestic containers can vary by purchaser.29  

Some domestic containers do not meet all of the AAR M‐930 standards, and they may

have been designed to couple only with a specifically configured chassis. These containers

operate in private fleets that use equipment that may not be compatible with the equipment of

other operators.30

Certain domestic containers typically are fabricated from corrugated carbon steel

panels, as this is the material that best fulfills the performance requirements and is demanded

by the intermodal freight industry, according to the Petitioner and Respondents.31 Corrugated

carbon steel offers better durability, weatherproofness, and structural integrity, resulting in a

longer useful life and lower maintenance cost.32 However, domestic containers can be made of

any material of sufficient strength and durability to meet the AAR M‐930 performance

requirement; according to the Respondent, aluminum and Duraplate panels have been used in

the past.33

Early domestic containers were based on designs for dry cargo trailer vans, which

consisted of approximately 13 aluminum plates, mechanically fastened to form one panel. Such

a domestic container required more than ***.34 The respondents stated that they tested and

then started using steel welded containers in 2005, and that welded steel containers proved to

be more durable and more resistant to leakage than containers made from mechanically

fastened aluminum plates.35

Following assembly, the container is treated with paint to prevent rust, corrosion, and

damage.36 The flooring in the interior of the container is solid wood, multilayered, or plywood

                                                      

25 Petition, p. 10.

26 Petition, exh. I‐2, AAR M‐930.

27 AAR M‐930.   28 Conference transcript, pp. 161‐162 (Drella).

29 Conference transcript, p. 116 (Drella, DeLozier). Postconference brief of CIMC and Singamas, p. 2.

30 Petition, p. 7 n. 7.

31 Conference transcript, p. 46 (Fenton), p. 77 (Fenton), p. 107 (DeLozier), pp. 113‐114 (Cerny), p. 127

(Drella), p. 180 (Dean); Petition, p. 7.

32 Conference transcript, pp. 113‐114 (Cerny), p. 127 (Drella).

33 Conference transcript, p. 105 (DeLozier).

34 Postconference brief of Stoughton, n. 27, p. 9.

35 Postconference brief of J.B. Hunt, pp. 4‐6.

36 Conference transcript, pp. 164‐165 (Drella).
I‐10

flooring. Customers typically specify laminated oak flooring because in‐service usage has

demonstrated that this type of flooring can last the useful life of the container,37 which is

designed to be approximately 15 years.38

Certain domestic containers include specific design features to enable lifting, stacking,

and securing during transport.39 Handling fittings allow for the loading and unloading of the

container from the rail car and chassis. Domestic containers are specifically designed to be

stacked, through the installation of stacking frame handling fittings. The fittings, welded at the

40 foot positions onto the container, allow for the container to be lifted vertically.40 A feature

called a gooseneck tunnel allows for most of the container to have a greater interior height

than it would have without the gooseneck tunnel; the portion of the container that rests on the

gooseneck of the trailer, where the trailer hitcher attaches to the truck, has a slightly shorter

interior height for the length of the gooseneck tunnel.41 Forward facing and rear downward

facing fittings interface with the trailer chassis and secure the container for transport by road.42  

Respondents stated that the freight companies and railroads that use certain domestic

containers prefer a larger size, known as high cube containers.43 The key difference from the

user’s perspective is not the height, but the additional interior width that is possible with some

high cube container designs. The high cube containers with an interior width of more than 100

inches allow for 25 pallets to be loaded into the container in a pinwheel formation instead of 22

pallets in straight rows in a standard container.44 A high cube container has exterior dimensions

of 53 feet in length, 8 feet 6 3/8 inches in width, and 9 feet 6 1⁄2 inches in height. Constructed

from thinner walls, the high cube container’s minimum interior dimensions are 52 feet 6 inches

in length, 8 feet 3 inches in width, and 9 feet 1 3/8 inches in height.45 The standard size

container has exterior dimensions of approximately 53 feet in length, 8 feet 6 3/8 inches in

width, and 9 feet 6 inches in height. On the interior, the standard container has a length of 52

feet 4 1/8 inches, a minimum interior width, at the narrowest point of the container between

the stacking frame posts, of 8 feet 1 13/16 inches, and a height of 8 feet 8 5/16.46 Respondents

stated that Stoughton does not offer a container with an interior width of more than 100

inches.47 Petitioner stated that it has produced containers with an interior width of 8 feet 3

inches (99 inch) and designed the containers so that it can move the walls out to meet

                                                      

37 Postconference brief of CIMC and Singamas, pp. 10 ‐11.

38 Petition, p. 7.

39 AAR M‐930, pp. 4‐5.

40 Petition, p. 6. 41 Petition, pp. 6‐7.   42 AAR M‐930, p. 5

43 Conference transcript, pp. 147‐148 (Drella), p. 148 (Cerny). 44 Conference transcript, pp. 53‐54 (Fenton), pp. 108 (DeLozier), p. 128 (Drella).

45 AAR M‐930, p. 6. Petition, p. 7.

46 AAR M‐930, p. 6. Petition, p. 7. 47 Conference transcript, pp. 107‐109 (DeLozier), pp. 127‐128 (Drella).
I‐11

specifications for containers of more than 100‐inches inside width. Petitioner stated that it has

not yet had the opportunity to build a container with a wider interior.48  

Manufacturing processes

The manufacturing process for certain domestic containers consists of three primary

procedures, which can be completed a variety of ways, but typically follow a single process.49

 Creating subassemblies50

 Assembling all subassemblies to other members of the container51

 Finishing, including painting and installing flooring52

The product is made from multiple sheets of carbon steel which are shaped to add

corrugation, as specified by the customer.53 Cutting, bending, and forming of the steel panels

and rails may be done inside the production facility, or by a vendor.54 The sheets are attached

to form the five panels for the container: the roof panel, floor panel, two side panels, and front

panel. A rear wall with a door frame and doors affixed to swing hinges is also produced.55

Stacking posts are attached to the frame, which provide the interfaces on the exterior for

stacking containers and transferring weight. Cross‐member beams are installed from side panel

to side panel across the bottom of the container to support the flooring and evenly distribute

the load to the container frame.56

The product can be produced using two attachment methods, either mechanical

assembly or welding.57 Mechanically fastened containers are assembled with sections of flat

metal structure. Industrial machine presses punch and rivet the raw material.58 The smaller

sections are painted, and then assembled into the box. Steel‐welded containers are assembled

from sheets of corrugated steel, which are welded together into panels. 59 There are also hybrid

attachment methods.  

Currently, the predominant method of attaching the subassemblies of certain domestic

containers is through welding.60 The Petitioner stated that it welds all of the subassemblies, but

                                                      

48 Conference transcript, p. 47, p. 88 (Fenton).   49 Petition, p. 8; conference transcript, p. 28 (Fenton).

50 Petition, p. 8.

51 Petition, p. 8.

52 Petition, p. 8.   53 Conference transcript, pp. 169 – 171 (Dean).

54 Conference transcript, p. 75 (Wahlin). 55 Petition, p. 8.

56 Conference transcript, p. 27 (Fenton). 57 Petition, p. 8; conference transcript, p. 28‐31 (Fenton).

58 Conference transcript, p. 79 (Wahlin).

59 Conference transcript, p. 80‐81 (Wahlin).

60 Petition, p. 8.; conference transcript, p. 180 (Dean), p. 27 (Fenton), p. 105 (DeLozier), p. 112

(Cerny).
I‐12

uses mechanical fastening in four locations, at each of the corner posts ***.61 The Petitioner

stated that Chinese companies introduced a steel‐welded construction process for certain

domestic containers in the early 2000s.62 Purchasers and importers of the subject product

stated that they started purchasing such containers from Chinese producers in the mid 2000s.63

Different perspectives on a fully welded and partially welded container are discussed in Part II.

Finishing involves installing the hardwood flooring, painting, installation of locks and

security devices, and application of decals and markings.64 The painting process includes

preparation of the surfaces, painting, and curing.65 Wood flooring is affixed to the cross‐

members on the floor of the container with self‐tapping screws.66 Finally, locks are installed,

markings for the customer are applied, and, if the container meets AAR M‐930 standards, a

certification plate is affixed to the front end of the container.67

DOMESTIC LIKE PRODUCT ISSUES

In addition to certain domestic containers, other means are used to transport dry goods.  

For example, whereas certain domestic containers are used in intermodal transportation within

North America, International Standards Organization (“ISO”) 20‐ and 40‐foot containers travel

back and forth in international maritime trade to transport goods by vessel.68  Unlike ISO

containers, certain domestic containers have greater capacity and are more efficient to connect

with intermodal rail and chassis equipment.69  Market participants viewed ISO containers

differently than certain domestic containers.70  No U.S. firm reportedly manufactures domestic

containers in lengths of other than 53 feet.71  

Trailers are also used to transport dry goods.  Over the years, some trailer

manufacturers also produced containers.  Between 1993 and 1998, Stoughton; Pines Trailer

Corporation; Monon Trailer Corporation; Great Dane Trailers; and Hyundai Translead were the

predominant U.S. manufacturers of aluminum plate intermodal containers.72  Between 2004

and 2005, Stoughton and Wabash modified their containers to accommodate an interior width

of more than 100 inches.73  These light‐weight aluminum containers with large interior space

                                                      

61 Conference transcript, pp. 70‐71 (Fenton).

62 Petition, p. 2.

63 Conference transcript, p. 105‐107 (DeLozier), pp. 115, 117 (Cerny), p. 124 (Dean), p. 127 (Drella).

64 Conference transcript, pp. 164‐165 (Drella). AAR specifications, 4.7

65 Conference transcript, pp. 80‐81 (Wahlin).

66 Petition, p. 8; Conference transcript, p. 26 (Fenton), p. 107 (DeLozier); Postconference brief of

CIMC and Singamas, pp. 11‐12.

67 AAR M‐930, p. 19.

68 Petition, p. 5; Conference transcript, p.192‐93 (Cerny).

69 Petition, p. 21.

70 Conference transcript, pp.189‐93 (Drella, Delozier, Dean, Cerny). 71 Petition, pp. 5 n.5, 21, 22 n.29.

72 Conference transcript, p.104 (DeLozier); Postconference brief of J.B. Hunt, p.4.

73 Conference transcript, p.181 (Cerny).
I‐13

rode as top containers on trains, could not be stacked on rail cars, and lacked a roof aperture to

lock in a top box; being primarily assembled using mechanical fasteners such as bolts and rivets

instead of welding, aluminum plate containers reportedly encountered water leakage and

resultant damages to the cargo because over time holes from mechanical fasteners provided

water entry points.74  Between 2000 and 2004, Wabash National Corporation sold mechanically

assembled DuraPlate containers manufactured in the United States from two thin layers of

steel plate that were bonded to a middle core of formed plastic to form a product that was

heavier and smaller than the aluminum containers but that could be double‐stacked on a train

well car instead of single‐stacked on a spine car for rail transport.75  After the 2005 introduction

by CIMC, Singamas, and Shanghai C. & Jindo Container Co. Ltd. of lighter‐weight, fully‐welded

steel containers made in China that complied with exterior‐width restrictions but that had

greater interior widths due to thin but durable walls with structural integrity that could

withstand double‐stacking on rail cars and reportedly provided a longer useful life with fewer

leakage claims, the number of U.S. firms manufacturing containers fell.76  Petitioner Stoughton

idled its 53‐foot domestic containers manufacturing facilities in 2006 after finding it was no

longer competitively viable with the imported product from China.77

After reconfiguring its plant,78 Stoughton resumed production of certain domestic

containers in 2011, and it is the only current manufacturer of certain domestic containers in the

United States.79 Stoughton produces certain domestic containers in a separate location from its

trailer manufacturing facilities.80  Having lost many of the employees previously engaged in

manufacturing certain domestic containers after it idled those facilities in 2006, since resuming

operations in 2011, Stoughton has been able to use some of its employees that manufacture

trailers for its certain domestic container facility, but those employees needed additional

                                                      

74 Conference transcript, pp.104‐07 (DeLozier), p. 122 (Dean); Postconference brief of J.B. Hunt,  

pp. 4‐5. 75 Postconference brief of J.B. Hunt, p.5; Conference transcript, p.20 (Wahlin), p. 84 (Fenton), p. 92

(Wahlin) (noting that to his knowledge, Wabash was not involved in manufacturing containers for

intermodal transport), p. 105 (DeLozier).  Hub also reported that in the early 2000s, it closely monitored

Baser Stag Train’s efforts to develop a domestic light‐weight steel container.  Conference transcript,

p.112 (Cerny).   76 Postconference brief of J.B. Hunt, pp. 5‐6; Postconference brief of CIMC and Singamas, pp. 2‐3;

Conference transcript pp. 105‐09 (DeLozier), pp. 112‐116, 168 (Cerny), pp. 124‐25 (Dean), pp. 126‐29,

167‐68 (Drella).  ***.  Wabash supplemental trailer producer questionnaire response. 77 Conference transcript, p.20 (Wahlin).

78 Conference transcript, pp.28‐32, 79‐80 (Wahlin); Postconference brief of Stoughton, exh. 15.

79 Start‐up firm AICM intends to produce fully welded certain domestic containers in the United

States, and expects ***.  Staff telephone interview with ***, May 15, 2014; Postconference brief of J.B.

Hunt, p.11; Conference transcript, pp.88‐89 (Wahlin, Levin), p. 125 (Dean).

80 Petition, pp.23‐24; Conference transcript, pp.20, 25‐26, 32 (Wahlin) (reporting producing certain

domestic containers in Evansville but producing trailers in Stoughton and Brodhead, Wisconsin).  

Stoughton produces chassis in a separate part of the Evansville, Wisconsin facility where it manufactures

certain domestic containers.  Conference transcript, p.25 (Wahlin).
I‐14

training in the welding, assembly, or industrial skills associated with certain domestic

containers.81  Of the approximately two dozen firms reportedly producing trailers in the United

States, none are believed to produce certain domestic containers.82

Today, certain domestic containers consist of cargo boxes constructed from thin

corrugated steel welded together that can be mounted on a chassis or double‐stacked in a rail

car.83  They have a steel‐welded rear frame with aperture holes on the bottom plate to allow

engagement to a chassis twist lock securement device.84  Certain domestic containers have

stacking frames along with upper and lower fittings and castings so that they can be double‐

stacked and top lifted on and off the chassis and rail equipment.85  Like trailers, certain

domestic containers have wood flooring and a rear door system consisting of door panels,

seals, hinges, and lock rods.86  In contrast, certain domestic containers do not connect directly

to a highway tractor but have a fore and aft tunnel recess in the bottom of the container that

fits over the raised “gooseneck” in the front of a chassis.87  Trailers are the rear portion of a

motor vehicle and consist of a mostly mechanically assembled cargo box made from thin

aluminum or even thinner galvanized steel or composite materials that is permanently

integrated into an undercarriage to form a “monocoque” structure that carries itself.88  Unlike

the chassis that is used to carry certain domestic containers, trailers’ integrated undercarriage

includes running gear with wheels and tires, brakes, an electrical system, lights, a rear impact

under ride guard to prevent other vehicles from traveling underneath a trailer in case of impact,

and a kingpin, which connects the trailer directly to the highway tractor.89  Cargo may be

                                                      

81 Conference transcript, pp. 96‐97 (Wahlin); Postconference brief of Stoughton, exh. 16.

82 Other than Stoughton, none of the trailer manufacturers submitting responses to the

supplemental trailer questionnaire reported producing certain domestic containers between January

2011 and March 2014.   83 Petition, p.21 n.28; Conference transcript, pp.35‐36 (Wahlin), p. 77 (Fenton), p. 122 (Dean);

Postconference brief of Stoughton, exh. 44 (Differences of Std. Trailer vs. Chassis/Container

Combination and accompanying diagrams).

84 Conference transcript, p.29 (Wahlin); Postconference brief of Stoughton, exh. 44 (Differences of

Std. Trailer vs. Chassis/Container Combination and accompanying diagrams).

85 Conference transcript, pp.32‐33 (Wahlin), p. 104 (Delozier) ; Postconference brief of Stoughton,

exh. 44 (Differences of Std. Trailer vs. Chassis/Container Combination and accompanying diagrams).

86 Conference transcript, p.29 (Wahlin), pp. 76‐77 (Fenton); Postconference brief of Stoughton, exh.

44 (Differences of Std. Trailer vs. Chassis/Container Combination and accompanying diagrams).

87 Conference transcript, p.29 (Wahlin), p. 72 (Fenton); Postconference brief of Stoughton, exh. 44

(Differences of Std. Trailer vs. Chassis/Container Combination and accompanying diagrams).

88 Petition, p.21 n.28; Conference transcript, p.32 (Wahlin), pp.35‐36 (Hoades), pp. 77‐78, 97

(Fenton); Postconference brief of Stougthon, exh. 44 (Differences of Std. Trailer vs. Chassis/Container

Combination and accompanying diagrams).

89 Conference transcript, p.32 (Wahlin), p.35 (Hoades), pp. 77‐78 (Fenton); Postconference brief of

Stoughton, exh. 44 (Differences of Std. Trailer vs. Chassis/Container Combination and accompanying

diagrams).
I‐15

transported via trailer on flat car (“TOFC”), but without stacking frames, fittings, and castings,

trailers cannot be double‐stacked in rail cars, limiting cargo volumes and increasing costs.90

The choice between trailers and certain domestic containers depends on factors such as

routes, availability of rail lines, distances, destinations, costs, delivery times, and availability of

equipment.91  Railroads, among the primary purchasers of certain domestic containers, typically

do not purchase trailers, whereas trucking companies and leasing companies that lease back to

carriers purchase both certain domestic containers and trailers.92  But, even when sold in

overlapping channels of distribution, trailers and certain domestic containers may  serve

different purposes.93  Trucking companies may prefer trailers for short‐ and medium‐range

over‐the‐road transportation but use certain domestic containers for longer intermodal

routes.94  For intermodal moves over long distances, with the longest portion of the movement

typically on a rail car, certain domestic containers are increasingly preferred and are most

commonly used to take advantage of lower rail freight costs relative to over‐the‐road

transportation by trailers.95  Compared to using trailers, intermodal transport by certain

domestic containers is less sensitive to spikes in fuel costs or shortages in truck drivers, and

improved scheduling reliability for railroads also makes certain domestic containers increasingly

more attractive.96  The ability to send twice the volume of cargo by double‐stacking certain

domestic containers on rail cars is a feature unavailable for trailers.97

                                                      

90 Petition, p.21, 23; Conference transcript, pp.32‐33 (Wahlin), pp. 83‐84 (Fenton) (explaining that

when “piggybacking” a trailer on a flat car, the pop‐up stanchion in a flat car connects to the trailer’s

kingpin while the trailer’s running gear or tires sit behind it over a center section that prevents the

structure from moving side‐to‐side), p. 104 (DeLozier);  Postconference brief of J.B. Hunt, p.5.

91 Petition, p.22, 24, exh. I‐9; Postconference brief of J.B. Hunt, p.4; Postconference brief of

Stoughton, exh. 34‐36.  Using certain domestic containers limits the loading and unloading of cargo,

because, for example, the cargo contents remain in the certain domestic container while the container

is lifted onto a container chassis attached to a truck tractor, moved to a rail yard, double‐stacked onto a

rail car, transported by rail, off‐loaded onto a second container chassis, and transported to the ultimate

destination where the cargo is finally off‐loaded.  Petition, p.21.

92 Petition, p.23; Conference transcript, p.59 (Wahlin).

93 Conference transcript, pp.194‐95 (Drella, Delozier, Cerny).  The Intermodal Association of North

America separately tracks monthly movements of certain domestic containers, trailers, and ISO

containers.  Petition, p.24, exh. I‐6 to I‐8; Conference transcript, p.37; Postconference brief of

Stoughton, exh. 43.

94 Petition, p. 23; Conference transcript, pp. 120, 195‐96 (Cerny)

95 Petition, p. 21, 23; Conference transcript, p. 33 (Wahlin), pp. 35‐36 (Hoades), p. 120 (Cerny);

Postconference brief of J.B. Hunt, p.3.

96 Conference transcript, pp. 136‐37 (Drella), p. 138 (Dean), pp. 138‐39 (DeLozier), p. 151 (Drella), p.

153 (Whitehead); Postconference brief of Stoughton, exh. 34‐36, 44; Postconference brief of J.B. Hunt,

p. 4; Postconference brief of CIMC and Singamas, exh. 1 pp. 12‐18.  During the 1990s and early 2000s,

respondents reported that railroads had some surplus capacity, so there was space for TOFCs, but as

roads became more congested and railroads aggressively took action to modify their routes to permit

double‐stacked COFCs that could carry greater volumes of cargo in a higher but shorter space, trailers

(continued...)
I‐16

Stoughton sells certain domestic containers directly to its customers but sells certain

trailers to a network of distributors and directly to customers.98  Stoughton reported shipping

certain domestic containers ***, whereas U.S. producers of certain trailers reported shipping

certain trailers ***.

According to Stoughton, customer preferences do not meaningfully impact the

price of certain domestic containers, but customer preferences lead to great price variances

among trailers.99  Additionally, Stoughton argued that the substantial cost of the undercarriage

causes the base price of trailers to be many thousands of dollars higher than certain domestic

containers.100  The average unit values reported by the U.S. producer of certain domestic

containers ranged from $*** to $*** and average unit values reported by U.S. producers of

certain trailers ranged from $*** to $***.

Petitioner Stoughton asks the Commission to define the domestic like product to

consist of the certain domestic containers described in the scope of the investigations, and

argues that there are clear dividing lines between certain domestic containers and trailers.101  

For purposes of the preliminary investigations, respondents agree with Stoughton’s proposed

domestic like product.102

                                                      

(...continued)

became less attractive compared to certain domestic containers.  Conference transcript, pp. 138‐42,

182‐85 (Dean, DeLozier, Drella, Cerny).

97 Petition, p. 21, 23; Conference transcript, p. 33 (Wahlin), p. 35‐36 (Hoades).

98 ConferencetTranscript, p. 36 (Hoades).

99 Conference transcript, p. 37 (Hoades).

100 Conference transcript, p. 37 (Hoades).

101 Petition, pp.11, 20‐25; Conference transcript, pp.34‐37 (Hoades); Postconference brief of

Stoughton, p. 2‐4.

102 Conference transcript, pp.176‐77 (Morgan, Heffner); Postconference brief of CIMC and Singamas,

p. 16.
II‐1

PART II: CONDITIONS OF COMPETITION IN THE U.S. MARKET

U.S. MARKET CHARACTERISTICS

The market for certain domestic containers has relatively few participants. On the

supply side, there are two foreign manufacturers and the U.S. producer, Stoughton. One

additional U.S. firm (AICM) is known to be in the planning stages of introducing and

manufacturing certain domestic containers.1 The two foreign producers are also U.S. importers

of certain domestic containers. Fewer than one dozen firms purchase the majority of certain

domestic containers; these firms are also the end users of the product.2

  

U.S. freight carriers and leasing companies engaged in intermodal shipping within the

United States are the primary customers for, and end users of, for certain domestic containers.

Intermodal transport containers generally, and certain domestic containers specifically, are

used to transport goods across long overland distances, typically by a combination of rail and

truck. The market for intermodal shipping has been expanding as railroads have upgraded

routes to enable double‐stacked containers to pass through tunnels and as logistics for handling

and scheduling deliveries have improved. Higher fuel costs and limitations on drivers (including

regulations affecting the number of hours they can drive without rest) have made the

economics of intermodal shipping more attractive.  

In general, the market for certain domestic containers is driven by the demand for

intermodal shipping which is related to general economic activity and a transition taking place

from other forms of shipping to intermodal due to the efficiencies discussed above.3 Demand

for certain domestic containers at any given time also reflects by purchasers’ anticipated needs,

the number of replacements that may be needed for containers reaching their 15‐year useful

life, and capital availability.4  

Various estimates place the number of certain domestic containers currently in use in

the United States between 200,000 and ***.5 These estimates include containers that may be

used for intermodal shipping between the United States and Canada and/or Mexico.6 Data

 

1 Conference transcript, p. 14 (Morgan) and p. 126 (Dean).   2 The four purchasers attending the conference – J.B. Hunt, Hub, Schneider, and Norfolk Southern –

represent an estimated 70 percent of reported imports and domestic purchases.  Conference transcript,

p. 12 (Morgan).  The other leading purchasers are CSX, C.H. Robinson, Swift, and Union Pacific. These

eight purchasers reportedly account for almost 95 percent of purchases in the U.S. market. Conference

transcript, p. 188 (Morgan and Cerny).     3 Conference transcript, p. 50 (Wahlin) and pp. 136‐137 (Drella). 4 Conference transcript, pp. 135‐136 (Drella). 5 Conference transcript, p. 50 (Wahlin) and p.135 (Delozier); “Intermodal News Report” (LoadMatch

and Drayage.com) reports 201,410 certain domestic containers in use in the United States as of

February 4, 2014. Petition Exhibit I‐13. ***.

6 *** of intermodal loadings both originate and terminate between U.S. destinations. Postconference

brief of CIMC and Singamas, exh. 1, p. 9.
II‐2

submitted by the U.S. and foreign producers indicate that apparent U.S. consumption was ***

units in 2011, *** units in 2012, and *** units in 2013.7

   

From 2011 through 2013, the Petitioner was the only U.S. manufacturer and produced a

total of *** containers.8 There is currently no U.S. production of certain domestic containers

and there has been only limited U.S. production since January 1, 2011. Accordingly, a

substantial portion of certain domestic containers currently in use in the United States were

imported from China.  

CHANNELS OF DISTRIBUTION

The U.S. market is largely supplied by imports from China with only very limited

production in the United States since January 1, 2011. *** sales by Stoughton and the two

foreign producers since January 1, 2011 were directly to end users. For *** of reported imports,

the two foreign producers also served as importers of record for U.S. purchasers/end users,

although, in some cases, the U.S. end user was the importer of record. Domestically produced

certain domestic containers are sold on an f.o.b. basis at Evansville, Wisconsin. Imported

certain domestic containers are delivered to a port of entry from which the end user will

arrange inland transportation.  

End users are railroad, trucking, and logistics companies that purchase certain domestic

containers to serve intermodal routes that are typically long‐haul.9 Large trucking companies

will purchase chassis in addition to containers and sometimes in greater quantities since chassis

are needed at both ends of an intermodal route.10 Railroads use well cars designed to carry

certain domestic containers, often in a double stacked configuration. According to LoadMatch

and Dryage.com, approximately one‐third of the domestic containers in use are managed by

railroads with the balance managed by trucking and third‐party logistics companies.11 ***

estimates that U.S. and Canadian railroads own *** percent of the domestic container fleet,

private large fleets own *** percent, and other types of entities own *** percent.12

GEOGRAPHIC DISTRIBUTION

Stoughton reported selling certain domestic containers to ***.  One hundred percent of

sales were ***. All imported certain containers are delivered to a port and inland transport is

managed by the end user.  

 

7 Apparent U.S. consumption is the number of containers added to the fleet each year. Table IV‐3.

8 Stoughton has not produced any certain domestic containers since the first quarter of 2013.

Conference transcript, p. 42 (Levin).

9 Other types of trailers or containers are employed in drayage or short‐haul freight routes. Petition,

p. 23.

10 Petition, p. 23. 11 “Intermodal News Report.” LoadMatch and Drayage.com. Petition, exh. I‐13. 12 Postconference brief of CIMC and Singamas, ***.
II‐3

SUPPLY AND DEMAND CONSIDERATIONS

U.S. supply

Domestic production

Based on available information, Stoughton has the ability to respond to changes in

demand with moderate to large changes in the quantity of shipments to the U.S. market. The

main contributing factor to this degree of responsiveness of supply is the availability of unused

capacity, offset by *** inventories, no shared capacity, and *** alternate markets for certain

domestic containers.

The sole U.S. production facility is located in Evansville, Wisconsin. Stoughton reported

its 2013 capacity as *** containers and indicated it could ***.13 There are *** inventories of

the product and alternative products are not produced on shared equipment.

Respondents and U.S. purchasers expressed concerns about Stoughton’s product

quality, capacity to meet orders, and ability to deliver required quantities in a timely manner.14

*** had ordered *** containers from Stoughton in 2011, but due to ***.15 Part V further

discusses end user supply concerns in bidding and lost sales allegations.

Industry capacity

Domestic capacity utilization ***. This *** level of capacity utilization suggests that the

U.S. producer may have *** capacity to increase production of certain domestic containers in

response to an increase in prices.

Alternative markets

As certain domestic containers are primarily used in the United States, there are limited

alternative markets (i.e., Canada and Mexico). Stoughton has *** to shift shipments between

the U.S. market and other markets in response to price changes.  

Inventory levels

Stoughton’s history of production and shipments (***) suggests it has limited ability to

use inventories as a means of increasing shipments of certain domestic containers to the U.S.

market. Stoughton’s inventory was ***.  

 

13 Petition, Vol. 1, p. 33. 14 Conference transcript, p. 114 (Cerny), p. 123 (Dean), pp. 128‐129 (Drella), and pp. 208‐209

(Morgan).   15 *** questionnaire at III‐16 and ***.
II‐4

Production alternatives

Stoughton responded that its production ***.16

Supply constraints

Stoughton states that this is a nascent industry and its ability to supply the U.S. market

is constrained by its lack of sales. It asserts that introducing certain domestic containers into the

U.S. market necessitates pre‐production discussions, building of prototypes, field testing,

feedback on quality and performance, and successive improvements in design and production.

It states that sales in excess of the *** containers it has sold are necessary to develop a product

acceptable to purchasers.17  

Subject imports from China

Based on available information, producers of certain domestic containers from China

have the ability to respond to changes in demand with relatively *** changes in the quantity of

shipments to the U.S. market. The main contributing factors to this degree of responsiveness of

supply are the availability of unused capacity and the ability to switch from alternate products

to certain domestic containers.

Industry capacity

Chinese producers’ reported capacity to produce certain domestic containers *** from

*** containers in 2011 to *** containers in 2013. The *** in capacity for certain domestic

containers is attributable to ***.18 Capacity utilization for subject product decreased from ***

percent to *** percent for certain domestic containers.19  

Alternative markets  

*** Chinese shipments were to the U.S. market. Chinese producers’ exports to other

markets *** of total shipments from January 1, 2011 to March 31, 2014.20 The lack of large

alternative markets for certain domestic containers indicates that Chinese producers are

unlikely to have an ability to shift shipments between markets in response to a change in

demand or price.

 

16 ***. 17 Postconference brief of Stoughton, p. 5.

18 Overall Chinese capacity to produce ***. Overall capacity utilization during that time period ***

from *** percent to *** percent.

19 See table VII‐2 and table VII‐3.

20 The other export markets for Chinese producers are Canada and Mexico. Postconference brief of

CIMC and Singamas, exh. 1, p. 9‐10.  
II‐5

Inventory levels  

Chinese producers’ inventories as a ratio to total shipments ***. Because there is an

element of seasonality to container shipments, interim ratios are not directly comparable to

annual ratios. However, the quantity of inventories held by Chinese producers was at its ***

reported level at the end of the first quarter of 2014.

Production alternatives  

Chinese producers reported that they produce *** on the same equipment used to

produce certain domestic containers. Overall, Chinese producers manufacture ***.

Supply constraints

Chinese producers reported that the level of demand for various container ***. Other

factors reported as ***.  

Nonsubject imports

There are no reported nonsubject imports of certain domestic containers.

U.S. demand

Based on available information, the overall demand for certain domestic containers is

likely to experience little change in response to changes in price. The main contributing factor is

the lack of substitute products. The cost of certain domestic containers represents a small share

of intermodal shipping revenues.21  

End uses

U.S. demand for certain domestic containers depends on the general level of U.S.

economic activity and demand for intermodal shipping by freight carriers. Data published by

the Association of American Railroads (AAR) show two indicative demand trends: an overall

increase in U.S. rail intermodal traffic since the 1990s and the steady displacement of trailers

 

21 Intermodal shipping accounts for approximately 22 percent of revenue for major U.S. railroads. In

2012, railroad freight revenue totaled nearly $68 billion. See American Association of Railroads (AAR),

“Rail Intermodal Keeps America Moving,” Postconference brief of Stoughton, exh. 34, p. 1 and AAR,

“Class I Railroad Statistics,” available at:

https://www.aar.org/StatisticsAndPublications/Documents/AAR‐Stats‐2013‐07‐09.pdf (accessed May

24, 2014). Respondents to Commission questionnaires generally viewed the product end use as the

container itself.
II‐6

used for intermodal transport in favor of containers.22 According to data from the Intermodal

Association of North America (“IANA”), annual loadings for intermodal shipments rose steadily

through 2006, decreased during the recession from 2007 through 2009, and increased

thereafter. Intermodal shipments increased each successive year from 2011 to 2013, and were

higher in the first quarter of 2014.23  

The use of intermodal shipping in the United States has been increasing at a rate

exceeding the rate of increase of GDP.24 Factors contributing to growth in intermodal shipping

demand include: improved logistics services, higher fuel costs (intermodal is more energy

efficient than trucking), truck driver shortages, and increased international trade. About half of

U.S. rail intermodal traffic is related to international trade.25 For long distances, intermodal

shipping is less expensive because of double stacking and a reduced number of handlings.26

In any given year, the demand for certain domestic containers is a function of several

factors including anticipated intermodal shipping demand, the need for replacement of retired

containers, and capital availability of the major carriers that purchase containers. Purchases of

containers tend to be made in large blocks and may not correlate with the short‐term trend in

shipping volume.  

Business cycles

Stoughton reported that demand for certain domestic containers usually *** from

March to October. *** responding importers noted that containers are generally ordered so

that they arrive in the August‐November time frame to correspond with the peak shipping

season. One importer also noted that the age of the container fleet and the need for

replacements can affect demand cycles. Another importer indicated that the market is not

subject to business cycles or other distinctive conditions of competition.

Apparent consumption

Overall, apparent U.S. consumption of certain domestic containers *** from 2011 to

2013, from *** containers to *** containers. U.S. consumption for this product is defined by

the gross number of containers added to the domestic fleet annually. The total number of

certain domestic containers in use in the United States reportedly increased during 2011‐13

and was higher in the first quarter of 2014. However, apparent consumption of certain

domestic containers in any given year varies depending on the need for replacement of aging

containers and purchasers’ anticipated shipping requirements, among other reasons. Post‐

 

22 AAR, “Rail Intermodal Keeps America Moving,” November 2013. Postconference brief of

Stoughton, exh. 33, p. 1 and Intermodal Association of North America, “Total Intermodal Loads” graph,

Postconference brief of Stoughton, exh. 35.

23 IANA, Postconference brief of Stoughton, exh. 40 and exh. 43.

24 Conference transcript, p. 50 (Wahlin), pp. 122‐123 (Dean) and p. 136 (Drella).

25 AAR, pp. 4‐5. Conference transcript, p. 55 (Wahlin).

26 Postconference brief of Stoughton, exh. 44 and exh. 36, Hatch, p. 7.
II‐7

recession pent‐up demand may explain higher demand for certain domestic containers in 2011

compared with more recent levels.27  

Demand trends

Most firms reported a fluctuation in U.S. demand for certain domestic containers since

2011 (table II‐1). Demand outside the United States denotes smaller markets in Mexico and

Canada.28  

Table II-1 

Certain domestic containers: Firms’ responses regarding U.S. demand, by number of responding 

firms 

* * * * * * * 

Substitute products

Substitutes for certain domestic containers are limited. Stoughton and *** responding

importers responded that there are no substitutes for certain domestic containers. One

importer listed a 48‐foot container and another importer listed a truck trailer. Trailers or 48‐

foot containers may be used for intermodal transport, but trailers cannot be double‐stacked on

rail cars and smaller containers are no longer the industry standard.29 The Petitioner and

Respondents testifying at the conference stated that there are no comparable substitutes for

certain domestic containers.30  

Cost share

Certain domestic containers account for a small share of the cost of intermodal

shipping, but 100 percent of the cost when the container is viewed as the end‐use itself, as

indicated by ***.  

SUBSTITUTABILITY ISSUES

The degree of substitution between domestic and imported certain domestic containers

depends upon such factors as relative prices, quality (e.g., grade standards, reliability of supply,

defect rates, etc.), and conditions of sale (e.g., price discounts/rebates, lead times between

order and delivery dates, payment terms, product services, etc.). Based on available data, staff

believes that there is a moderate degree of substitutability between domestically produced

certain domestic containers and certain domestic containers imported from China.  

 

27 Conference transcript, pp. 135‐136 (Drella) and pp. 203‐204 (Dougan).

28 *** questionnaire response. Conference transcript, p. 190 (Drella).

29 Conference transcript, p. 147 (Drella).

30 Conference transcript, p. 138 (Dean), pp. 139‐140 (Cerny and Drella), and p. 200 (Levin).
II‐8

According to Respondents, there are non‐price factors that explain why the Chinese

product is preferred in the U.S. market. Respondents assert that the product produced by

Stoughton is different from the product from China because it is not fully welded.31 They stated

that the interior dimensions of Stoughton’s certain domestic containers are narrower than the

imported product.32 One witness at the conference also cited quality issues and the inability to

deliver in a timely manner as reasons why Stoughton’s product is not established in the

marketplace.33  

Stoughton has produced two “generations” of designs for its certain domestic

containers. Both generations of the Stoughton design use mechanical fastening for the rear

door frame and floor assemblies. Respondents assert that experience with mechanical

fasteners indicate that they become loose over time and lead to water leakage.34  

***.35 Stoughton asserts that its quality will meet or exceed that of the Chinese

competition.36

Petitioner concedes that there were design issues with Generation 1 of Stoughton’s

certain domestic containers, but that Generation 2 containers resolved those issues and have

been in service without any reported problems.37 *** of the containers sold by Stoughton ***

since January 2011 were delivered to *** which has not reported any problems to Stoughton.38

Because of low prices for Chinese imports, Stoughton asserts that it has not had sufficient

opportunities to sell its containers, receive feedback from the field, and make design

improvements.39  

Lead times

Certain domestic containers are primarily sold on a produced‐to‐order basis. Stoughton

and U.S. importers that are also foreign producers reported that *** percent of domestic

containers are produced‐to‐order. Stoughton reported lead times of ***. Importers that are

also foreign producers reported lead times ranging from ***.    

 

31 Postconference brief of CIMC and Singamas, pp. 6‐9.

32 Conference transcript, pp. 123‐124 (Dean), pp. 107‐108 (Delozier), and p. 128 (Drella).

Respondents contend that Stoughton’s certain domestic containers have an interior width of 99 inches

while the interior width of Chinese imports is 100 3/8 inches. The additional width allows for a pinwheel

configuration of pallets that enables a total of 25 pallets instead of 22 pallets to be fitted into the cargo

space.  Postconference brief of J.B. Hunt, p. 12.

33 Conference transcript, p. 123 (Dean).

34 Postconference brief of CIMC and Singamas, pp. 7‐8, 10. The experience described by Respondents

was with aluminum containers, not steel domestic containers.

35 The compliance documentation that was reviewed shows ***. Postconference brief of CIMC and

Singamas, exh. 1, p. 19.

36 Conference transcript, p. 88 (Wahlin).

37 Postconference brief of Stoughton, p. 6.

38 Postconference brief of Stoughton, p. 10 and exh. 4.***.   39 Conference transcript, pp. 201‐202 (Levin) and postconference brief of Stoughton, pp. 8‐9, 13.
II‐9

Comparison of U.S.‐produced and imported certain domestic containers

As shown in table II‐2, Stoughton indicated that U.S.‐produced certain domestic

containers are *** interchangeable with the Chinese product. *** U.S. importers indicated that

U.S.‐produced domestic containers are “never” interchangeable and *** indicated that they are

“sometimes” interchangeable. Factors cited by responding importers that are also end users

varied. *** importers cited quality, including the not fully‐welded design. *** importer noted

that no current U.S. manufacturer has experience producing to its specifications.  *** importer

stated that both U.S. and Chinese containers can *** be used for the same application provided

they are able to meet purchasers’ minimum quality standards.

Table II-2 

Certain domestic containers: Interchangeability between certain domestic containers produced in 

the United States and in China 

* * * * * * * 

As presented in table II‐3, Stoughton reported that differences other than price were

*** significant in sales of certain domestic containers produced in the United States and China,

while most importers found that differences other than price were “always” significant. The

factors other than price reported by importers included: quality and design, availability of fully‐

welded steel containers, safety and maintenance considerations, production capacity, service

levels, ease of doing business, historical ability to adhere to commitments, and differences in

specifications.

Table II-3 

Certain domestic containers: Significance of differences other than price between certain 

domestic containers produced in the United States and in China 

* * * * * * * 

III‐1

PART III: U.S. PRODUCER’S PRODUCTION, SHIPMENTS, AND

EMPLOYMENT

The Commission analyzes a number of factors in making injury determinations (see 19

U.S.C. §§ 1677(7)(B) and 1677(7)(C)). Information on the subsidies and dumping margins was

presented in Part I of this report and information on the volume and pricing of imports of the

subject merchandise is presented in Part IV and Part V. Information on the other factors

specified is presented in this section and/or Part VI and (except as noted) is based on the

questionnaire response of Stoughton that accounted for all known U.S. production of certain

domestic containers.

U.S. PRODUCER

The Commission issued a U.S. producer questionnaire to Stoughton based on

information contained in the petition, and an additional firm (Wabash National Corporation

(“Wabash”)) based on staff research of the industry.1 Stoughton provided useable data on its

production operations. Staff believes that this response represents all current U.S. production

of certain domestic containers.  

Table III‐1 lists the sole U.S. producer of certain domestic containers, its production

location, position on the petition, total production, and share of total production.  

Table III-1 

Certain domestic containers: U.S. producer of certain domestic containers, its position on the 

petition, production location, production, and share of reported production, January 2011-March 

2014 

* * * * * * * 

Table III‐2 presents information on Stoughton’s changes in operations since 2011.

Stoughton has produced certain domestic containers intermittently during 2011‐13; it has not

produced certain domestic containers in 2014.2

Table III-2 

Certain domestic containers: U.S. producer’s changes in operations, since 2011 

* * * * * * * 

Stoughton was founded in 1961 as a manufacturer of truck bodies and semitrailers at its

production facility in Stoughton, Wisconsin.  In 1993, plant 7 was added in Evansville, Wisconsin

                                                      

1 Wabash Exits Domestic Container Market, April 1, 2006. Wabash submitted a supplemental trailer

producer questionnaire response which reported that it ***. 2 Conference transcript, pp. 21, 96‐97 (Wahlin).
III‐2

to manufacture domestic containers.  In 1998, plant 7 expanded from 240,000 square feet to

300,000 square feet. Plant 7 produced certain domestic containers utilizing a mechanical

process to assemble aluminum containers.3  In the early 2000’s, Chinese manufacturers

introduced a steel‐welded construction process. Stoughton found its mechanical‐assembly

process was no longer competitively viable and produced its last mechanically assembled

container in 2006.4 In 2007, Stoughton shut down plant 7.5

  In 2009, Stoughton received

inquiries from rail and truck carriers and leasers that were interested in securing a U.S.

manufacturer of certain domestic containers.6 In 2009, Stoughton began converting plant 7

from a mechanically assembled production line to a steel‐welded production line.7

  In 2011,

Stoughton re‐opened plant 7 with the intention of increasing production capacity to

commercially competitive levels (approximately *** certain domestic containers) over the next

several years.8

  However, Stoughton reports that it has not produced more than nominal

volumes.  Moreover, Stoughton has not produced a certain domestic container for commercial

sale since the first quarter of 2013.9  

Stoughton’s certain domestic container has several points of connection that are

accomplished by mechanical means.10 Additionally, whereas the certain domestic containers

produced by Stoughton to date have an interior width of 99 inches, Stoughton reports that it

has designed a certain domestic container with an interior width of 100 1⁄2 inches.11      

Stoughton is not related to any foreign producer of certain domestic containers nor is it

related to any U.S. importer of certain domestic containers. In addition, Stoughton does not

directly import certain domestic containers nor does it purchase certain domestic containers

from U.S. importers.  

PROSPECTIVE U.S. PRODUCER

AICM is a startup U.S. company that intends to produce a fully welded certain domestic

container.12 13 J.B. Hunt and Norfolk Southern stated that they had discussed certain domestic

                                                      

3 Stoughton’s production of aluminum mechanically fastened domestic containers utilized ***. Today

Stoughton’s welded steel certain domestic container utilizes ***. Postconference brief of Stoughton, pp.

9‐10 n. 27. 4 Petition, pp. 2‐3 and conference transcript, pp. 20 (Wahlin), 29 (Fenton). 5 Petition, p. 3.

6 Conference transcript, p. 20 (Wahlin). 7 Conference transcript, pp. 29‐30 (Fenton).

8 Petition, p. 3 and conference transcript, p. 20 (Wahlin).

9 Conference transcript, p. 21 (Wahlin).

10 Stoughton reported that ***. Stoughton reported that ***. Postconference brief of Stoughton,

exh. 14.

11 Conference transcript, pp. 46‐47 (Fenton). 12 Conference transcript, p. 14 (Morgan).

13 ***. ***, p. 7.
III‐3

containers with AICM and would welcome a U.S. source of supply that met their quality

specifications.14   

AICM has ***.15

***.16 ***.17  

AICM expects a ***.18 ***.19 20

U.S. PRODUCTION, CAPACITY, AND CAPACITY UTILIZATION

Table III‐3 and figure III‐1 present Stoughton’s production, capacity, and capacity

utilization. Stoughton has produced at relatively low levels since January 2011, and has not

produced any certain domestic containers since the first quarter of 2013.21

Table III-3 

Certain domestic containers: U.S. producer’s production, capacity, and capacity utilization, 2011-

13, January-March 2013, and January-March 2014 

* * * * * * * 

Figure III-1 

Certain domestic containers: U.S. producer’s production, capacity, and capacity utilization, 2011-

13, January-March 2013, and January-March 2014 

* * * * * * * 

U.S. PRODUCER’S U.S. SHIPMENTS AND EXPORTS

Table III‐4 presents Stoughton’s commercial U.S. shipments, export shipments, and total

shipments. Stoughton has not had a commercial sale since the first quarter of 2013.22 In 2011,

Stoughton was awarded a contract to supply Norfolk Southern with 1,525 certain domestic

containers.  It did not meet the contract delivery terms and the order was reduced to 1,025

certain domestic containers.23 Norfolk Southern subsequently observed caulking on the side

panels and irregularities due to forming or stamping (causing the side panel to be distorted and

                                                      

14 Conference transcript, pp. 108, 110 (DeLozier) and 125‐126 (Dean).

15 ***, pp. 8, 11.

16 ***. ***, p. 10. 17 ***, pp. 8, 13.

18 Staff telephone interview with ***, May 15, 2014. ***. ***, pp. 8, 11.

19 ***, pp. 7‐8.

20 ***. ***, May 15, 2014. 21 Conference transcript, p. 21 (Wahlin). 22 Conference transcript, p. 21 (Wahlin).

23 Conference transcript, p. 123 (Dean).
III‐4

difficult to fit and weld panels), and reduced its order to 199 Generation 1 certain domestic

containers and one Generation 2 certain domestic container.24 In 2012, Stoughton sold ***.25

Table III-4 

Certain domestic containers: U.S. producer’s U.S. shipments, exports shipments, and total 

shipments, 2011-13, January-March 2013, and January-March 2014 

* * * * * * * 

U.S. PRODUCER INVENTORIES

Table III‐5 presents Stoughton’s end‐of‐period inventories and the ratio of these

inventories to Stoughton’s production, U.S. shipments, and total shipments over January 2011‐

March 2014.

Table III-5 

Certain domestic containers: U.S. producer’s inventories, 2011-13, January-March 2013, and 

January-March 2014 

* * * * * * * 

U.S. EMPLOYMENT, WAGES, AND PRODUCTIVITY

Table III‐6 presents Stoughton’s employment‐related data during January 2011‐March

2014. Particular skills and training are needed to weld certain domestic containers which

Stoughton has provided to its employees who have produced certain domestic containers.

Nonetheless, Stoughton has been able to move employees from its other manufacturing

facilities to plant 7 when there have been orders for certain domestic containers.26 27

                                                      

24 Conference transcript, pp. 123‐124 (Dean).

25 Postconference brief of Stoughton, p. 10. ***. Postconference brief of Stougthon, exh. 4.   26 Conference transcript, pp. 96‐97 (Wahlin).

27 Most of the employees that worked on the mechanically assembled certain domestic containers

produced at Stoughton from 1993‐2007 lost their jobs when the facility was closed in 2007.  A few

employees were transitioned into Stoughton’s trailer operations.  Conference transcript, p. 96 (Wahlin).

When Stoughton introduced its steel welded container, most of its former production related workers

were no longer available. For the employees that were available, the steel welded container was a vastly

different product (and plant) requiring new training and development. Although some skill sets

appeared similar (weld, industrial paint, etc.) it was a very different environment (welding of thinner

steel materials, new robotic/tracking weld systems, new material handling systems, very different

profiles for industrial painting). Postconference brief of Stoughton, exh. 16.
III‐5

Table III-6 

Certain domestic containers: Average number of production and related workers, hours worked, 

wages paid to such employees, hourly wages, productivity, and unit labor costs, 2011-13, 

January-March 2013, and January-March 2014 

* * * * * * * 

Stoughton has not produced a certain domestic container since first quarter 2013;

however, its ***.  Staff questioned the ***:

 ***.

 ***.

 ***.

 ***.28

. 

                                                      

28 Stoughton’s U.S. producer questionnaire response, revised question II‐7, May 23, 2014.  

IV‐1

PART IV: U.S. IMPORTS, APPARENT U.S. CONSUMPTION, AND MARKET

SHARES

U.S. IMPORTERS

The Commission issued importer questionnaires to 62 firms potentially importing

certain domestic containers, as well as to all U.S. producers of certain domestic containers.1

Usable questionnaire responses were received from seven companies identifying themselves as

importers of record of certain domestic containers, representing *** percent of U.S. imports

from China for January 2011‐March 2014 (compared to Chinese producers’ reported exports to

the United States). Such imports enter the United States under HTS heading 8609.00.00, a

“basket” category that encompasses all containers and not just certain domestic containers.2 3

In light of the U.S. importer data coverage, unless otherwise noted, U.S. import data presented

throughout this report are based on the reported exports to the United States of certain

domestic containers by the only two known producers in China (CIMC and Singamas).4 There

were no reported imports from nonsubject countries from January 2011 through March 2014.5

Table IV‐1 lists all responding U.S. importers of certain domestic containers from China, their

locations, and their shares of U.S. imports during January 2011‐March 2014.   

 

1 The Commission issued questionnaires to those firms identified in the petition, along with firms

that, based on a review of data provided by U.S. Customs and Border Protection (“Customs”), may have

accounted for more than 0.2 percent of total imports under HTS heading 8609.00.00 in January 2011‐

January 2014.   2 CIMC and Singamas reported that it depends on the customer whether their firms act as the

importer of record.  This will vary from customer to customer and may even vary for the same customer.

For example, *** identified themselves as exclusively consignees and not importers of record, while ***

and reported substantially smaller volumes than suggested by Chinese producers’ questionnaire

responses.  Additionally, whether the container arrives full or empty may determine which firm is the

importer of record. Conference transcript, pp. 131‐132 (Yeung), pp. 132‐133 (Hagen).

3 U.S. importers and U.S. purchasers receive payment for use of their certain domestic container

when the container is shipped from China containing third party merchandise. Postconference brief of

CIMC and Singamas, exh. 1 p. 9. 4 Conference transcript, pp. 11‐12 (Morgan), p. 134 (Morgan), p. 104 (DeLozier) (stating that there

are only two Chinese producers of certain domestic containers). Postconference brief of CIMC and

Singamas, pp. 20‐21 n. 51.  The petition listed a third potential Chinese producer, Shanghai C & Jindo

Container Co., Ltd. (“Jindo”). However, Jindo is no longer in business.  Conference transcript, pp. 11‐12

(Morgan) and p. 17 (Wahlin). 5 Conference transcript, p. 134 (Morgan), p. 134 (DeLozier), p. 134 (Cerny), p. 135 (Drella), p. 135

(Dean).
IV‐2

Table IV-1 

Certain domestic containers: Responding U.S. importers by source, January 2011-March 2014 

Firm Headquarters 

Imports from China 

(share in percent) 

A123 Systems LLC Westborough , MA ***

China International Marine Containers (Group), 

Ltd. Shenzhen, China ***

Crowley Liner Services, Inc.1 Jacksonville, FL ***

Hub City Terminals, Inc. Oak Brook, IL ***

J.B. Hunt Transport, Inc. Lowell, AR ***

Singamas North America, Inc San Ramon, CA ***

Union Pacific Railroad Company Omaha, NE ***

Total 100.0

1

 The certain domestic containers ***. Email from ***, May 19, 2014. 

Source: Compiled from data submitted in response to Commission importer questionnaires. 

U.S. IMPORTS  

Table IV‐2 presents data for U.S. imports of certain domestic containers from China and

all other sources. Imports from China decreased from 2011 to 2013. During 2008‐10, firms

reportedly limited capital expenditures, contributing to pent‐up demand. In 2011, the economy

improved and firms were able to replace older containers. Thus, the spike in imports from

China in 2011 has been characterized as an anomaly based on pent‐up demand. Imports of

certain domestic containers from China are expected to increase at a modest rate.6

Table IV-2 

Certain domestic containers: U.S. imports by source, 2011-13, January-March 2013, and JanuaryMarch 2014 

* * * * * * * 

Figure IV‐1 presents data for U.S. import quantities and average unit values.

Figure IV-1 

Certain domestic containers: U.S. import quantities and average unit values, 2011-13, JanuaryMarch 2013, and January-March 2014 

* * * * * * * 

 

6 Conference transcript, pp. 135‐137 (Drella), p. 137 (DeLozier).
IV‐3

NEGLIGIBILITY

The statute requires that an investigation be terminated without an injury

determination if imports of the subject merchandise are found to be negligible.7 Negligible

imports are generally defined in the Tariff Act of 1930, as amended, as imports from a country

of merchandise corresponding to a domestic like product where such imports account for less

than 3 percent of the volume of all such merchandise imported into the United States in the

most recent 12‐month period for which data are available that precedes the filing of the

petition or the initiation of the investigation.8 Imports from China accounted for 100.0 percent

of total imports of certain domestic containers by quantity during April 2013‐March 2014.

APPARENT U.S. CONSUMPTION AND U.S. MARKET SHARES  

Table IV‐3 presents data on apparent U.S. consumption and U.S. market shares for

certain domestic containers.  

Table IV-3 

Certain domestic containers: U.S. shipments of domestic product, U.S. imports, apparent U.S. 

consumption, and U.S. market shares, 2011-13, January-March 2013, and January-March 2014 

* * * * * * * 

Figure IV‐2 presents data on apparent U.S. consumption.

Figure IV-2 

Certain domestic containers: U.S. apparent consumption, 2011-13, January-March 2013, and 

January-March 2014 

* * * * * * * 

 

7 Sections 703(a)(1), 705(b)(1), 733(a)(1), and 735(b)(1) of the Act (19 U.S.C. §§ 1671b(a)(1),

1671d(b)(1), 1673b(a)(1), and 1673d(b)(1)).

8 Section 771(24) of the Act (19 U.S.C § 1677(24)).

V‐1

PART V: PRICING DATA

FACTORS AFFECTING PRICES

Raw material costs

Raw materials represent approximately *** of COGS in the manufacture of certain

domestic containers.1 Carbon steel in the form of rolled steel, steel I‐beams, and steel castings

is the major raw material used and accounts for the majority of raw material costs (***).

Domestic containers also typically have a floor of wood planks or other wood materials.2  

Flooring material accounts for the next largest share of raw material costs (***), followed by

paint (***), door assemblies (***), and other components (***).3

  

Figure V‐1 shows the trend in hot‐rolled steel prices from January 1, 2011 through

March 31, 2014. U.S. domestic steel prices declined on average by 17 percent during 2011‐13

before increasing by 4 percent during the first quarter of 2014.4 Foreign producers stated that

selling prices for certain domestic containers generally track or fluctuate with steel prices.5

Figure V-1 

Certain domestic containers: Average hot-rolled steel sheet prices (Midwest), monthly, January 

2011-March 2014

Source: American Metal Market. 

                                                       

1 Stoughton’s raw material costs as a share of COGS since 2011 ranged from ***. 2 Conference transcript, p. 27 (Fenton).

3 Postconference brief of Stoughton, exh. 44. 4 The monthly average price of hot‐rolled steel (Midwest) was $760/ton in 2011, $659/ton in 2012,

$631/ton in 2013, and $655/ton during the first quarter of 2014. American Metal Market. 5 *** Foreign producer questionnaires.
V‐2

Transportation costs to the U.S. market

Stoughton quotes prices on an f.o.b. basis from its Evansville, Wisconsin manufacturing

plant. Inland transportation costs represent approximately *** percent of delivered cost to the

customer. All of Stoughton’s shipments of certain domestic containers since January 2011 were

shipped ***. Importers arrange for shipping to a port of entry and containers are transferred

inland to the initial location where they are put into service. Importers are one of two types:

they are either the foreign producer arranging for importation into the United States for the

end‐user, or they are the end user serving as the importer of record.  

An issue was raised by parties related to the role of laden versus empty containers on

the price paid by importers.6 In some cases, certain domestic containers are shipped from China

loaded with unrelated goods. The revenue from providing that service offsets the shipping costs

of the containers for the importer.7 End users sometimes differentiate loaded (i.e., laden) and

empty containers in their Requests for Quotations (RFQs) to Chinese producers.8

  

PRICING PRACTICES

Pricing methods

Transaction prices for certain domestic containers are determined through bid

competition or quoted directly to an end‐user. *** of the U.S. producer’s sales of ***

containers during 2011‐13 were successfully bid in response to a RFQ and *** were spot sales.

U.S. importer, *** reported not undertaking a bidding process. *** U.S. importers that are end

users report using a bidding process for *** of their purchases.9 The Commission also received

completed questionnaires from *** end users that were not importers of record.10 ***

reported that they use a bid process for purchases. The two foreign producers that are also

importers *** through a bid process. Further information is provided in the Questionnaire bid

data following the discussion on price data.

Stoughton reported selling *** of its product in the spot market and *** under short‐

term contracts. U.S. importers/end users reported that *** percent of their purchases were

through short‐term contracts. Orders for large quantities of containers are placed one to two

times per year by the major end users rather than on a monthly or other regular basis.11 Firms

reporting RFQs each placed only *** during the January 1, 2013 to March 31, 2014 period.  

                                                      

6 Postconference brief of CIMC and Singamas, exh. 1, p. 9. Revised data were submitted to reflect

imported prices of empty containers at the port of entry. 7 Conference transcript, p. 155 (Yeung and Hagen).

8 *** importer questionnaire response, at III‐2d.

9

   ***.

10 ***. ***.   11 Conference transcript, p. 56 (Dougan) and p. 60 (Wahlin).
V‐3

PRICE DATA

The Commission requested the U.S. producer and importers of certain domestic

containers to provide quarterly data for the total quantity and value of containers shipped to

unrelated U.S. customers from January 2011‐March 2014. The Commission normally requests

pricing data on sales from U.S. producers and importers. However, in this case, because

importers are a combination of foreign producers and U.S. end users, importers affiliated with

Chinese producers12 supplied sales data while other U.S. importers13 provided purchase cost

data.14 The products for which price data were requested15 are as follows:

Product 1.‐‐ 53‐foot dry domestic containers suitable for intermodal transport, as

described and specified in American Association of Railroads Specification M‐930

(Adopted: 1972; Last Revised: 2013) applicable to closed van containers for

domestic intermodal service.

Product 2.‐‐ 53‐foot high cube dry domestic containers suitable for intermodal

transport, as described and specified in American Association of Railroads

Specification M‐930 (Adopted: 1972; Last Revised: 2013), applicable to closed

van containers for domestic intermodal service.  

All data submitted were for Product 2, “high‐cube” domestic containers. Product 1,

which describes a product of moderately smaller dimensions, is no longer sold.16  Stoughton

and *** importers that include both the two foreign producers serving as importers of record

and *** U.S. end users that were importers of record provided usable pricing data for the

requested products.17 Pricing data reported by the *** firms accounted for *** percent of U.S.

producers’ shipments of product and *** percent of U.S. imports from China during January

2011‐March 2014.18 In addition, *** U.S. purchasers/end users that were not importers

submitted purchase cost data that are presented in Appendix D.19

                                                      

12 ***.

13 ***. 14 Sales price refer to the price for which goods are sold; purchase cost refers to the price paid by a

purchaser. They are usually different because of markups and other transactions costs. Staff has

confirmed with CIMC and Singamas that the sales data reported for their U.S. imports are comparable to

purchase cost data reported by purchasers. Staff telephone interview ***, May 29, 2014. ***.

15 Petitioner identified these two pricing products in the petition.

16 Conference transcript, p. 148 (Drella and Cerny).   17 U.S. importer ***.

18 ***.

19 ***.
V‐4

Price and quantity data for Product 2 are presented in table V‐1 and figure V‐2. There

were no reported imports of certain domestic containers from nonsubject countries since

January 1, 2011.

Table V-1 

Certain domestic containers: Weighted-average f.o.b. prices and quantities of domestic and 

imported product 2, by quarters, January 2011- March 2014 

* * * * * * * 

Figure V-2 

Certain domestic containers: Weighted-average prices and quantities of domestic and imported 

product, by quarters, January 2011- March 2014 

* * * * * * * 

Price trends and comparisons

Prices for products imported from China generally *** during 2011 through 2013 and

*** during the first quarter of 2014. The quantity of containers sold by Stoughton was *** and

***, making price trends difficult to compare. Stoughton reported prices accounted for ***. In

the *** quarters in which Stoughton sold the subject product, purchases from China were at a

price of between *** percent and *** percent lower than U.S. sales prices, with the smallest

differences in the earliest comparisons and the largest differences in the most recent

comparisons. As shown in table V‐2, the price of imports from China decreased by *** from

January 1, 2011 to March 31, 2014. The first quarter of 2013 was ***. The unit price Stoughton

obtained was *** than during ***.   

Table V-2 

Certain domestic containers: Summary of weighted-average f.o.b. prices for product 2 from the 

United States and China 

* * * * * * * 
V‐5

Questionnaire bid data

A portion of U.S. imports and purchases were subject to a bidding process. The

Commission requested information regarding bids that were issued by end users to foreign

producers and the U.S. manufacturer. Table V‐3 presents explanations of the bidding process of

firms reporting that information. ***.20  

Table V-3 

Certain domestic containers: U.S. end users’ explanations of bidding process 

* * * * * * * 

U.S. end users were also asked to provide bid data for the five highest‐value purchases

of certain domestic containers for delivery between January 1, 2013 and March 31, 2014.

Information was requested about the type of product, the number of units, the bidders, the

initial bidding price, the final bid price, and the winning bid.21 Tables V‐4 and V‐5 present the

bid data submitted by importer/end users22 and purchaser/end users23 that issued RFQs for

purchases of “high‐cube” containers described in the Commission questionnaire as Product 2.

***.

The bidding processes for most of the firms reporting bid data were similar although

time‐frames for submitting and selecting final bids varied from one week to one month. Most

firms indicated that they negotiate with one or more of the bidders before arriving at the final

selection and bid price. Of the *** bid events reported during the period January 1, 2013 to

March 31, 2014, Stoughton was asked for a bid in *** and submitted proposals for ***.24 In

each instance, ***. ***.

                                                      

20 *** importer questionnaire responses, at III‐2f. 21 All bid and price data submitted to the Commission were for “Product 2.”   22 ***.

23 ***.

24 U.S. importer *** RFQs are not counted since they were for containers with substantially different

specifications. ***. See footnote, table V‐4.
V‐6

Table V-4 

Certain domestic containers: Bid events by U.S. importer/end users for Product 2 from January 1, 

2013 to March 31, 2014 

* * * * * * * 

Table V-5 

Certain domestic containers: Bid events by U.S. purchaser/end users for Product 2 from January 

1, 2013 to March 31, 2014 

* * * * * * * 

LOST SALES AND LOST REVENUE

The Commission requested the U.S. producer of certain domestic containers to report

any instances of lost sales or revenue they experienced due to competition from imports of

certain domestic containers from China since January 2011. Stoughton alleged *** instances of

lost sales to imported certain domestic containers from China.  

Staff contacted the *** purchasers cited in the allegations and received responses from

***.25 The Commission did not receive responses to *** allegations involving bids in response

to specific customer RFQs from ***. These ***. The *** allegations for which information was

received did not involve price quotes for specific order requests. ***. A summary of the

information obtained on the *** allegations is provided in table V‐6 and is discussed below.

Table V-6 

Certain domestic containers: U.S. producer’s lost sales allegations 

* * * * * * * 

*** disagreed with the allegation that Stoughton lost *** sales from ***. *** reported

that the quantity of the potential purchase was *** containers. *** stated: “*** requests bids

that include the cost of delivering containers to a point on its network. The rejected quote

identified in column 4 does not include delivery costs.26 The quote with delivery was ***. ***

based its decision to award the bid to another producer “based on several factors, one of which

was price.” *** provided additional information as follows: “***”.

The Commission received *** responses to Stoughton’s *** allegations that purchasers

wanted to see more of its product in the marketplace before considering an order. ***.  

*** with the allegation. *** submitted the following comment: “***”.

                                                      

25 *** 26 ***
V‐7

End users responding to the lost sales allegations also were asked whether they shifted

their purchases of product from the U.S. producer to suppliers of certain domestic containers

from China since January 2011. *** of the responding end users indicated that they did not

shift purchases from the U.S. producer to Chinese suppliers. In addition, they were asked

whether U.S. producers reduced their prices in order to compete with suppliers of product from

China. ***. ***.  

VI‐1

PART VI: FINANCIAL EXPERIENCE OF THE U.S. PRODUCER

INTRODUCTION

The sole U.S. producer, Stoughton, provided usable financial data on its operations on

certain domestic containers.  These data are believed to account for all U.S. production of

certain domestic containers from January 2011 to March 2014.  ***.

Stoughton’s current production of certain domestic containers began in 2011, and

involved the transformation of its existing production site from a mechanically assembled

production system to a steel welded production system.1

  From 1993 to 2006, Stoughton

produced mechanically assembled certain domestic containers from aluminum panels;

however, Stoughton ceased production and idled the plant after producers in China introduced

certain domestic containers made using a steel‐welded construction process.2 3

OPERATIONS ON CERTAIN DOMESTIC CONTAINERS

Income‐and‐loss data for the U.S. producer are presented in table VI‐1.  Operating

income was ***.  The reported aggregate net sales quantity and value *** from 2011‐12, then

*** from 2012‐13 to levels below those reported for 2011.

Despite the overall decline in net sales from 2011‐13, on a per‐unit basis net sales ***

during this time.  The per‐unit net sales value *** from 2011‐12, then *** from 2012‐13.  

During these same time frames, the per‐unit cost of goods sold (“COGS”) ***.  Thus, on a per‐

unit basis, gross and operating losses in 2012 were smaller than in 2011 as per‐unit revenue

increased and costs declined.  In 2013, gross and operating losses were greater than in 2012 as

per‐unit costs increased more than per‐unit revenue.  Similar trends in gross and operating

income occurred when the data are examined as a ratio to net sales.

Per‐unit raw material costs *** from 2011‐12, then *** from 2012‐13.  Raw materials

accounted for an average *** percent of total COGS for the reporting period.  According to

Stoughton, the principal raw materials and their approximate percentages of total raw material

costs are:  ***.4

   

 

1 Conference transcript, p. 30 (Fenton). 2 Conference transcript, p. 20 (Wahlin).   3 As previously mentioned in this report, the U.S. firm AICM, ***, has stated its intent to begin

production of certain domestic containers ***.  Conference transcript, p. 14 (Morgan), p. 126 (Dean);

Staff telephone interview with ***, May 15, 2014. 4 ***.  See also postconference brief of Stoughton, exhibit  44.
VI‐2

Table VI-1 

Certain domestic containers: Results of operations of U.S. producer Stoughton, 2011-13, 

January-March 2013, and January-March 2014 

*            *            *            *            *            *            *

Direct labor and other factory costs accounted for an average *** percent, respectively,

of total COGS from 2011‐13.  Per‐unit direct labor *** from      2011‐12, then *** from 2012‐13.  

Per‐unit other factory costs *** from 2011‐12, then *** from 2012‐13 as volume declined.5 6

U.S. producer Stoughton was asked to provide the percentages of variable costs and

fixed costs for its reported COGS and SG&A expenses for 2011, 2012, and 2013.  This

information, along with the firm’s profit‐and‐loss data, was used to calculate the breakeven

point (the sales quantity necessary to achieve a zero operating profit for certain domestic

containers operations) for those periods.

Variable costs were estimated to account for *** percent of total operating costs in

2011, *** percent in 2012, and *** percent in 2013, which suggests that during that time

Stoughton was able to cover ***.  From 2011‐13, the coverage of fixed costs ***.  For example,

in 2013, ***.  

Based on a standard breakeven formula (total fixed costs divided by per‐unit sales price

minus per‐unit variable costs),7 breakeven volumes would be ***.   As the spread between per‐

unit revenue and per‐unit variable costs increases (i.e., higher per‐unit prices and/or lower per‐

unit variable costs), the breakeven point for a given level of fixed costs will decline.  Conversely,

as the spread between per‐unit revenue and per‐unit variable costs declines (i.e., lower per‐unit

prices and/or higher per‐unit variable costs), the breakeven point for a given level of fixed costs

will increase.  

Capital expenditures, research and development expenses, and total assets

The responding firm’s aggregate data on capital expenditures, research and

development (“R&D”) expenses, and total assets are shown in table VI‐2.  Aggregate capital

expenditures and R&D expenses ***.  According to Stoughton, ***.8

   

The *** in total assets from 2011‐13 reflect ***.9

 

5 ***.  Postconference brief of Stoughton, pp. 34‐36, exhibits 30‐31, and email from Jeffrey Levin of

Levin Trade Law, May 28, 2014.      6 ***.  Postconference brief of Stoughton, p. 37, exhibit 33.   7 Cost Accounting, A Managerial Emphasis, Charles T. Horngren, Srikant M. Datar, George Foster,

Prentice Hall, 2003, pp. 64‐65.

8 Email from ***, May 16, 2014.  See also conference transcript, pp. 30‐32 (Fenton), pp. 79‐81

(Wahlin).

9 Email from ***, May 21, 2014.
VI‐3

Table VI-2 

Certain domestic containers: Capital expenditures, R&D expenses, and total assets of U.S. 

producer Stoughton, 2011-13, January-March 2013, and January-March 2014 

*            *            *            *            *            *            *

Capital and investment

The Commission requested the U.S. producer of certain domestic containers to describe

any current or anticipated negative effects of imports of certain domestic containers from

China on its growth, investment, ability to raise capital, development and production efforts, or

the scale of capital investments.  Responses by the U.S. producer Stoughton follow.

Effects of imports:

***.

Anticipated effects of imports:

***.10

 

 

10 ***.

VII‐1

PART VII: THREAT CONSIDERATIONS AND INFORMATION ON

NONSUBJECT COUNTRIES

Section 771(7)(F)(i) of the Act (19 U.S.C. § 1677(7)(F)(i)) provides that—

In determining whether an industry in the United States is threatened

with material injury by reason of imports (or sales for importation) of the

subject merchandise, the Commission shall consider, among other

relevant economic factors1‐‐ 

(I) if a countervailable subsidy is involved, such information as may

be presented to it by the administering authority as to the nature

of the subsidy (particularly as to whether the countervailable

subsidy is a subsidy described in Article 3 or 6.1 of the Subsidies

Agreement), and whether imports of the subject merchandise are

likely to increase,

(II) any existing unused production capacity or imminent, substantial

increase in production capacity in the exporting country indicating

the likelihood of substantially increased imports of the subject

merchandise into the United States, taking into account the

availability of other export markets to absorb any additional

exports,

(III) a significant rate of increase of the volume or market penetration

of imports of the subject merchandise indicating the likelihood of

substantially increased imports,

(IV) whether imports of the subject merchandise are entering at prices

that are likely to have a significant depressing or suppressing

effect on domestic prices, and are likely to increase demand for

further imports,

(V) inventories of the subject merchandise,

                                                            

1 Section 771(7)(F)(ii) of the Act (19 U.S.C. § 1677(7)(F)(ii)) provides that “The Commission shall

consider {these factors} . . . as a whole in making a determination of whether further dumped or

subsidized imports are imminent and whether material injury by reason of imports would occur unless

an order is issued or a suspension agreement is accepted under this title. The presence or absence of

any factor which the Commission is required to consider . . . shall not necessarily give decisive guidance

with respect to the determination. Such a determination may not be made on the basis of mere

conjecture or supposition.”
VII‐2

(VI) the potential for product‐shifting if production facilities in the

foreign country, which can be used to produce the subject

merchandise, are currently being used to produce other products,

(VII) in any investigation under this title which involves imports of both

a raw agricultural product (within the meaning of paragraph

(4)(E)(iv)) and any product processed from such raw agricultural

product, the likelihood that there will be increased imports, by

reason of product shifting, if there is an affirmative determination

by the Commission under section 705(b)(1) or 735(b)(1) with

respect to either the raw agricultural product or the processed

agricultural product (but not both),

(VIII) the actual and potential negative effects on the existing

development and production efforts of the domestic industry,

including efforts to develop a derivative or more advanced version

of the domestic like product, and

(IX) any other demonstrable adverse trends that indicate the

probability that there is likely to be material injury by reason of

imports (or sale for importation) of the subject merchandise

(whether or not it is actually being imported at the time).2

Information on the nature of the alleged subsidies was presented earlier in this report;

information on the volume and pricing of imports of the subject merchandise is presented in

Parts IV and V; and information on the effects of imports of the subject merchandise on U.S.

producers’ existing development and production efforts is presented in Part VI. Information on

inventories of the subject merchandise; foreign producers’ operations, including the potential

for “product‐shifting;” any other threat indicators, if applicable; and any dumping in third‐

country markets, follows. Also presented in this section of the report is information obtained

for consideration by the Commission on nonsubject countries.  

                                                            

2 Section 771(7)(F)(iii) of the Act (19 U.S.C. § 1677(7)(F)(iii)) further provides that, in antidumping

investigations, “. . . the Commission shall consider whether dumping in the markets of foreign countries

(as evidenced by dumping findings or antidumping remedies in other WTO member markets against the

same class or kind of merchandise manufactured or exported by the same party as under investigation)

suggests a threat of material injury to the domestic industry.”
VII‐3

THE INDUSTRY IN CHINA

The Commission issued foreign producers’ questionnaires to two firms believed to

produce and export certain domestic containers from China.3 Useable responses to the

Commission’s questionnaire were received from both firms: CIMC and Singamas. These firms’

exports to the United States accounted for approximately all U.S. imports of certain domestic

containers from China during January 2011‐March 2014. According to estimates requested of

the responding Chinese producers, the production of certain domestic containers in China

reported in this Part of the report accounts for all known production of certain domestic

containers in China. Table VII‐ 1 presents information on each foreign producers’ production,

exports, and total shipments.

Table VII-1 

Certain domestic containers: Data for producers in China, January 2011-March 2014 

* * * * * * * 

CIMC is dedicated to manufacturing and supplying containers, trailers, tank equipment

and airport facilities.4 CIMC is the largest container manufacturer in the world.5 CIMC estimated

that it accounted for approximately *** percent of certain domestic containers production in

China.  

Singamas is one of the world’s leading container manufacturers and a major logistics

operator in the Asian‐Pacific region.6 Singamas estimated that it accounted for approximately

*** percent of certain domestic containers production in China.  

Table VII‐ 2 presents information on the certain domestic container operations of the

only two known producers and exporters in China. Certain domestic containers are only used

within North America.7 CIMC reported ***. Singamas reported ***. Reported capacity

fluctuates throughout January 2011‐March 2014 because *** CIMC and Singamas ***.  

                                                            

3 These firms were identified through a review of information submitted in the petition and

contained in proprietary Customs records.  As previously stated, the petition listed a third potential

Chinese producer, Shanghai C & Jindo Container Co., Ltd. (“Jindo”), but according to testimony there are

only two producers in China of certain domestic containers.  Conference transcript, pp. 11‐12 (Morgan)

and p. 104 (DeLozier). 4 http://www.cimc.com/en/about/company/BusinessOverview/, retrieved May 23, 2014.   5 Conference transcript, p. 17 (Wahlin).

6 http://www.singamas.com/main/company_profile.asp, retrieved May 23, 2014. 7 Conference transcript, p. 14 (Morgan); Postconference brief of Stoughton, p. 45.
VII‐4

Table VII-2 

Certain domestic containers: Data for producers in China, 2011-13, January-March 2013, and 

January-March 2014 

* * * * * * * 

Table VII‐3 presents information on Chinese producers’ overall production, capacity, and

capacity utilization. The ***. During 2011‐13, Singamas reported that it ***. During 2011‐13,

CIMC reported that ***.8

Table VII-3 

Certain domestic containers: Chinese producers’ overall capacity, production, and capacity 

utilization, 2011-13, January-March 2013, and January-March 2014 

* * * * * * * 

U.S. INVENTORIES OF IMPORTED MERCHANDISE

***.  *** are end users of certain domestic containers. Certain domestic containers are

immediately put into use, but during slow periods some U.S. purchasers of certain domestic

containers may store them.9

  However, the stored certain domestic containers are owned by

U.S. purchasers for their use and thus are not considered unsold U.S. imports of certain

domestic containers.

U.S. IMPORTERS’ OUTSTANDING ORDERS

The Commission requested importers to report whether they imported or arranged for

the importation of certain domestic containers from China after March 31, 2014. *** reported

that *** arranged such shipments. Table VII‐4 presents U.S. import shipments of certain

domestic containers arranged for importation after March 31, 2014.

Table VII-4 

Certain domestic containers: U.S. importers’ current orders arranged for delivery after March 31, 

2014 

* * * * * * * 

                                                            

8 Email from ***, May 28, 2014

9 Conference transcript, p. 153 (Whitehead),  
VII‐5

ANTIDUMPING OR COUNTERVAILING DUTY ORDERS IN THIRD‐COUNTRY MARKETS

There have been no antidumping duty, countervailing duty, or safeguard investigations

on certain domestic containers in any other country.

INFORMATION ON NONSUBJECT COUNTRIES

There are no known imports of certain domestic containers from any nonsubject

countries.10 Staff believes there is no production of certain domestic containers in any

nonsubject country.11

                                                            

10 Conference transcript, p. 134 (Morgan), p. 134 (DeLozier), p. 134 (Cerny), p. 135 (Drella), p. 135

(Dean). 11 Postconference brief of CIMC and Singamas, exh. 1, p. 11 (***.)

A‐1

APPENDIX A

FEDERAL REGISTER NOTICES  

A‐3

The Commission makes available notices relevant to its investigations and reviews on its

website, www.usitc.gov.  In addition, the following tabulation presents, in chronological order,

Federal Register notices issued by the Commission and Commerce during the current

proceeding.   

Citation Title Link 

79 FR 24005, April 

29, 2014 

53-Foot Domestic Dry Containers From 

China; Institution of Antidumping and 

Countervailing Duty Investigations and 

Scheduling of Preliminary Phase 

Investigations 

http://www.gpo.gov/fdsys/pkg/FR2014-04-29/pdf/2014-09691.pdf

79 FR 28674, May 

19, 2014 

53-Foot Domestic Dry Containers From 

the People’s Republic of China: 

Initiation of Antidumping Duty 

Investigation 

http://www.gpo.gov/fdsys/pkg/FR2014-05-19/pdf/2014-11519.pdf

79 FR 28679, May 

19, 2014 

53-Foot Domestic Dry Containers From 

the People’s Republic of China: 

Initiation of Countervailing Duty 

Investigation

http://www.gpo.gov/fdsys/pkg/FR2014-05-19/pdf/2014-11527.pdf

B-1 

APPENDIX B

LIST OF CONFERENCE WITNESSES

B-3 

CALENDAR OF PUBLIC PRELIMINARY CONFERENCE

Those listed below appeared as witnesses at the United States International 

Trade Commission’s preliminary conference: 

Subject: 53-Foot Domestic Dry Containers from China 

Inv. Nos.: 701-TA-514 and 731-TA-1250 (Preliminary) 

Date and Time: May 14, 2014 - 9:30 am 

Sessions were held in connection with these preliminary investigations in Court Room B 

(room 111), 500 E Street, S.W., Washington, DC. 

OPENING REMARKS: 

Petitioner (Jeffrey S. Levin, Levin Trade Law, P.C.) 

Respondents (Frank H. Morgan, White & Case LLP) 

 

 

In Support of the Imposition of 

Antidumping and Countervailing Duty Orders: 

Levin Trade Law, P.C. 

Bethesda, MD 

on behalf of 

and 

Hodes, Keating & Pilon 

Chicago, IL 

on behalf of 

Stoughton Trailers, LLC 

 Robert (“Bob”) Wahlin, President, Stoughton 

 Trailers, LLC 

 Gary L. Fenton, Vice President, Engineering, 

 Stoughton Trailers, LLC 

 
B-4 

In Support of the Imposition of 

 Antidumping and Countervailing Duty Orders (continued): 

James Dougan, Senior Economist, Economic 

 Consulting Services, LLC 

 Jeffrey S. Levin ) 

 ) – OF COUNSEL 

 Michael Hodes ) 

In Opposition to the Imposition of 

Antidumping and Countervailing Duty Orders: 

 

Drinker Biddle & Reath LLP 

 Washington, DC 

 on behalf of 

J.B. Hunt Transport, Inc. 

 Kent Delozier, Director of Maintenance, J.B. Hunt 

 Transport, Inc. 

 Mark Whitehead, Senior Vice President, Risk Management 

 & Claims, J.B. Hunt Transport, Inc. 

 Douglas J. Heffner ) 

 ) – OF COUNSEL 

 Richard P. Ferrin ) 

White & Case LLP 

Washington, DC 

on behalf of 

China International Marine Containers (Group), Ltd. 

CIMC USA 

Singamas Management Services, Ltd. 

Singamas North America, Inc. 

 Daniel Drella, Director of Intermodal Equipment and 

 Maintenance, Schneider National, Inc. 

 O.H. Buzz Hagen, CEO, CIMC Intermodal Equipment 

 Johnny Yeung, Sales Director, Singamas 
B-5 

In Opposition to the Imposition of 

 Antidumping and Countervailing Duty Orders (continued): 

 Keir Whitson, Senior Advisor, White & Case LLP 

 Frank H. Morgan ) – OF COUNSEL 

 

Mayer Brown LLP 

Washington, DC 

on behalf of 

Hub Group, Inc. 

 Douglas Beck, Assistant General Counsel, Hub 

 Group, Inc. 

 Jakub Cerny, Vice President, Fleet Services, 

 Hub Group, Inc. 

 Charlie Green, Industry Engineering Expert, 

G-P Moves Freight, LLC 

 Matthew J. McConkey ) 

 ) – OF COUNSEL 

 Margaret-Rose Sales ) 

 

NON-PARTY APPEARANCE:

Norfolk Southern Corporation 

Norfolk, VA 

Paul Dean, Director of Intermodal Equipment and Maintenance, 

Norfolk Southern Corporation 

REBUTTAL/CLOSING REMARKS:

Petitioner (Jeffrey S. Levin, Levin Trade Law, P.C., Michael Hodes, Hodes, Keating 

 & Pilon and James Dougan, Economic Consulting Services, LLC) 

Respondents (Frank H. Morgan, White & Case LLP and Douglas J. Heffner,

 Drinker Biddle & Reath LLP)

C‐1

APPENDIX C

SUMMARY DATA

C‐3

All responses in appendix C contain information that would reveal confidential operations and

therefore have been deleted from this report.

D‐1

APPENDIX D

PURCHASER/END USER PRICE DATA
   
D‐3

Table D-1 

Certain domestic containers: Weighted-average f.o.b. prices and quantities of domestic and 

imported product 2 reported by purchaser/end users (non-importers), by quarters, January 2011- 

March 2014 

* * * * * * * 

.