Shipping surge follows US-China trade truce

[WORLD] A temporary truce in the U.S.-China trade war has unleashed a wave of trans-Pacific shipping activity, sending container rates soaring and prompting American importers to accelerate orders amid a 90-day window of tariff relief. Industry experts warn the surge could strain supply chains and push shipping costs toward pandemic-era highs.

Importers Race Against the Clock

The recent agreement between the United States and China to suspend most retaliatory tariffs for 90 days has dramatically altered the global shipping landscape. Since the announcement, container bookings from China to the U.S. have surged by nearly 300%, according to container-tracking provider Vizion. The seven-day average for shipments skyrocketed to 21,530 twenty-foot equivalent units (TEUs), up from just 5,709 TEUs the previous week.

The truce, reached after negotiations in Switzerland, slashed U.S. tariffs on Chinese goods from 145% to 30% and reduced Chinese tariffs on U.S. goods from 125% to 10%. This sharp reduction has incentivized U.S. retailers and manufacturers to front-load imports, especially with the threat of higher tariffs returning after the 90-day period.

“As the tariff pause has a clear and diminishing timeline, it intensifies the urgency for U.S. importers to transport as much as possible,” said Jonathan Roach, container analyst at Braemar Shipbroking in London.

The impact of this surge is not limited to the shipping industry alone. Manufacturers in China are also feeling the pressure, with many factories operating at near-capacity to fulfill the rush of orders. This has led to concerns about potential quality control issues and delays in production, as companies scramble to meet the accelerated timelines.

Shipping Rates Climb Amid Soaring Demand

The rush to capitalize on the tariff reprieve has triggered a steep increase in shipping rates. Reports from shipping executives and brokers in Singapore and London indicate that freight rates from China to the U.S. West Coast have jumped approximately 8% this week, with expectations that rates could rise by as much as 50% in the coming days.

The cost to ship a standard 20-foot container from Shanghai to Los Angeles now exceeds $3,000, while a 40-foot container to New York has climbed to $4,350-a 19.3% weekly gain and the sharpest increase since January 2024.

Major carriers are quoting rates for late May sailings nearly $900 per TEU above current levels, with further increases likely as the new Containerized Index is released next week.

This sudden spike in shipping rates is also affecting smaller importers and exporters who may not have the same negotiating power as larger corporations. Many are finding it difficult to secure space on ships at reasonable rates, leading to potential delays in their supply chains and increased costs for consumers.

Shipping companies are responding by ramping up capacity, but the sudden spike in demand is already tightening available space on trans-Pacific routes. Hapag-Lloyd, one of the world’s largest shipping firms, reported a 50% week-over-week increase in bookings for U.S.-China traffic in the days following the truce.

Early Peak Season and Supply Chain Strain

The suspension of tariffs has effectively pulled forward the industry’s traditional peak shipping season, which typically runs from July to October as retailers stock up for back-to-school and holiday shopping. Now, importers are rushing to beat the August deadline for potential tariff hikes, leading to an “early start and probably an early tapering off of the ocean peak season this year,” according to international freight platform Freightos.

Retail giants like Walmart and Amazon, along with numerous apparel and consumer goods brands, are scrambling to secure China-made merchandise for the summer and fall shopping seasons. This front-loading is expected to create bottlenecks at major U.S. ports, though analysts believe these will be less severe than the disruptions seen during the pandemic.

To mitigate the potential bottlenecks, some ports are implementing new measures, such as extended operating hours and increased automation, to handle the influx of containers. However, the effectiveness of these measures remains to be seen, as the volume of shipments continues to grow rapidly.

“The surge in container traffic could be so large that it creates bottlenecks and delays at American ports,” analysts warn.

Risks and Uncertainties Linger

While the tariff truce has provided short-term relief, industry experts caution that the underlying volatility remains. The GEP Global Supply Chain Volatility Index indicates that manufacturers are still wary, with many U.S. firms stockpiling materials to hedge against future tariff risks. The 90-day window is seen as too brief to fundamentally change long-term supply chain strategies or investment decisions.

Gene Seroka, executive director of the Port of Los Angeles, noted that the new 30% tariff rate-though lower than before-remains a significant burden for importers, especially given the tight timeline to place orders, manufacture goods, and ship them before the truce expires.

“This 90-day reprieve is not a long runway... We are cutting it so close,” Seroka said. Despite the current rush, some industry insiders are calling for a more strategic approach to supply chain management. They suggest that companies should consider diversifying their sourcing to other countries to reduce dependency on China and mitigate the impact of future trade disruptions.

Outlook: Will the Shipping Boom Last?

Some analysts predict that freight rates could approach the historic highs seen during the pandemic, when costs topped $20,000 per TEU, if demand continues to outpace supply in the next three months. However, competitive pressures among carriers may eventually force rate reductions, especially if the tariff pause is not extended and importers pull back after the initial surge.

The sustainability of the shipping boom will depend on the outcome of ongoing trade talks. If the truce lapses without a longer-term agreement, a renewed escalation in tariffs could again disrupt global supply chains and dampen demand.