China-US trade truce revives demand for container ships and creates traffic jams

Container ship bookings for goods shipped from China to the United States have surged since the two countries declared a 90-day truce on punitive tariffs last weekend, traders said, creating backups at Chinese ports and factories that could take weeks to clear.

U.S. importers of everything from sneakers and sofas to construction supplies and auto parts are rushing to get their goods in before the deadline to reinstate tariffs, setting the stage for disruptions reminiscent of the global shipping quagmire during the COVID-19 pandemic.

The surge in cargo at key trade entry points, such as Shenzhen's Yantian port, which handles more than a quarter of Chinese exports to the United States, has shipowners scrambling to coordinate berths and adjust vessel schedules.

"Demand is so high that we can only serve customers who have signed long-term contracts with us," a spokesperson for German container ship operator Hapag-Lloyd told Reuters. "We barely have any room for spontaneous bookings."

Container-tracking software provider Vizion said average bookings for the seven days ended Wednesday soared 277% to 21,530 20-foot equivalent units (TEUs), up from an average of 5,709 TEUs for the week ended May 5.

Toy factory owners for holiday decorations told Reuters they are booking pre-frozen shipments destined for U.S. stores, including Walmart .

Lalo, for example, which sells its baby furniture online and through retailers like Target and Amazon.com, is among the companies that have given factories the green light to move their finished orders.

"We had hundreds of thousands of units waiting to be shipped," explains Michael Weider, Lalo's co-founder. "These products can now be put on the water."

"Everyone at my company and at my friends' companies is very busy," said Richard Lee, general manager of NCL Logistics in the southern Chinese metropolis of Shenzhen. "They're preparing a lot of cargo, a lot of products, to be shipped immediately from China to the United States."

Second Tsunami?

The surge in shipments will translate into a flood of arrivals at U.S. West Coast ports in the coming weeks.

Still, industry experts, including the executive director of the Port of Los Angeles—the busiest U.S. seaport and the number one port for ocean shipments from China—don't expect a Covid-level cargo tsunami. Rather, they project a large, but manageable, wave.

On Thursday, the off-contract spot rate from Shanghai to Los Angeles jumped 16% from the previous week to $3,136 per 40-foot container, according to data from maritime consultancy Drewry.

The figure is less than half of what it was in April 2024, but could rise sharply on June 1 to around $6,000 per container if shipowners approve tariff increases.

In the early days of the pandemic, as now, peak cargo demand overwhelmed factories and container ships, putting supply chains in jeopardy.

Shipping and retail experts say 90 days isn't enough time for most factories to fill new orders.

There are fewer available berths on cargo ships because shipowners have been reducing voyages and schedules between China and the United States. Now, ocean carriers are "undoing cancellations" of sailings, Drewry said.

The demand, however, is noticeably different this time.

Trump's second-term tariffs have weakened U.S. retail sales, housing construction, and manufacturing—key drivers of container shipments.

Furthermore, many US companies are sitting on inventory accumulated before Trump imposed tariffs on China and other countries. And no one knows what the import tariffs will be when the 90-day deadline expires in August.