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Hapag-Lloyd ( HLAGF ) says demand so high, it can only serve

shippers on

long-term contracts

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Vizion says container bookings from China-US spike 277%

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Ship owners race to restart voyages canceled during China

shipping downturn

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Off-contract spot rates move higher

By Lisa Baertlein, Farah Master and Casey Hall

LOS ANGELES/HONG KONG, May 16 (Reuters) - Container ship

bookings for China-to-U.S. cargo have surged since the countries

declared a 90-day truce on punitive tit-for-tat tariffs last

weekend, operators said, spawning traffic jams at Chinese ports

and factories that could take weeks to clear.

U.S. importers of sneakers and sofas to construction

supplies and auto parts are racing to get goods in before the

deadline resets tariffs again, setting the stage for disruptions

that recall the global transport quagmire during the COVID-19

pandemic.

The cargo surge at major trade gateways like Shenzhen's

Yantian Port, which handles more than a quarter of China's

exports to the United States, has ship owners scrambling to

coordinate berths and adjust vessel schedules.

"The demand is so high that we can only serve customers who

have made long-term contracts with us," a spokesperson for

German container ship operator Hapag-Lloyd ( HLAGF ) told

Reuters. "We have hardly enough space for spontaneous bookings."

Container-tracking software provider Vizion said average

bookings for the seven days ended on Wednesday soared 277% to

21,530 20-foot equivalent units from the 5,709 TEU average for

the week ended May 5.

Owners of factories that make toys to holiday decor told

Reuters they are booking previously frozen cargo headed to U.S.

stores, including Walmart ( WMT ).

Lalo, for example, which sells its baby furniture online and

through retailers like Target ( TGT ) and Amazon.com ( AMZN ),

is among the companies that gave factories the green light to

move their finished orders.

"We had hundreds of thousands of units waiting to ship,"

said Lalo co-founder Michael Weider. "These products can now get

on the water."

"Everybody is very busy from my company, at my friend's

companies," said Richard Lee, CEO of NCL Logistics, in China's

southern metropolis of Shenzhen. "They are preparing a lot of

cargo, a lot of products, to be shipped immediately from China

to the U.S."

SECOND TSUNAMI?

The shipping surge will translate into a rush 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 No. 1 for

ocean shipments from China, do not foresee a COVID-level tsunami

of cargo. Rather, they project a large, but manageable wave.

On Thursday, the off-contract spot rate from Shanghai to

Los Angeles shot up 16% from the prior week to $3,136 per

40-foot container, according to data from maritime consultancy

Drewry. That is less than half than in April 2024, but could

jump sharply on June 1 to about $6,000 per container if ship

owners push through rate increases.

In the early days of the pandemic, as now, cargo demand

spikes overwhelmed factories and container ships, kinking supply

chains. Shipping and retail experts said 90 days is not enough

time for most factories to fill new orders.

Fewer slots are available on cargo ships because vessel

owners had been culling China-to-U.S. voyages and schedules.

Now, ocean carriers are "cancelling cancellations" of sailings,

Drewry said.

Demand, however, is markedly different this time.

Trump's second-term tariffs have weakened U.S. retail sales,

homebuilding and manufacturing - key drivers of container

shipments.

Moreover, many U.S. companies are sitting on inventory

accumulated before Trump imposed tariffs on China and other

countries. And nobody knows what import duties will be when the

90-day deadline expires in August.

The Trump administration confirmed to Reuters that the U.S.

rate would reset to 54%, assuming no agreement is reached by the

deadline.

HIGH ANXIETY

Many retailers are prioritizing which products to order and

ship, said Jessica Dankert, vice president of supply chain for

the Retail Industry Leaders Association trade group, whose

members include Home Depot ( HD ), Gap and Dollar

General ( DG ).

"It's still 30% at the end of the day," said Jamie Salter,

CEO of Authentic Brands Group, referring to tariffs on China.

Authentic Brands owns and licenses clothing brands including

Reebok, Champion, and Forever 21.

Some large suppliers to Detroit's Big Three automakers told

Reuters that on customers' requests, they are flying in parts

from China and stockpiling them.

Others declined to add to inventories, saying they lacked

the space and funds to do so.

A Halloween goods exporter from the city of Yiwu in China,

who gave her English name, Cecilia, said tariff increases have

cut total orders in half this year and warned that prospective

buyers are running out of time.

"If you order now, you will have an anxious wait to see if

it will be too late," she said.

Jimmy Zollo, CEO at Joe and Bella, sells Chinese-made

clothing for adults who have trouble dressing themselves due to

arthritis, dementia or being in a wheelchair. He placed a new

order with his supplier even though the 90-day window could

close before he can take delivery.

"We're hopeful that a new trade agreement is implemented,

and the lowered tariffs do not expire," Zollo said.