Helicopter crews had rescued 13 seamen and recovered five bodies after the 776-foot ship Leader L sank about 400 miles northeast of Bermuda late Thursday.
The survivors' conditions weren't immediately known, said Allison von Hagn, a U.S. Coast Guard spokeswoman in Norfolk, Virginia. The search was continuing with the help of Canadian and U.S. Coast Guard C-130 aircraft and a Liberian-flagged ship.
Some of the crewmen were plucked from the ship's life rafts, some from the water near where the vessel sank, and some had life rafts dropped to them from aircraft and were later picked up by the choppers.
"There are still people alive out there floating around, so that's good news," said Lt. Cmdr. Glenn Chamberlain, a spokesman for the Canadian search-and-rescue mission launched from Halifax, Nova Scotia.
"We wish they were all in rafts, but at least we're picking up survivors," he said.
The survivors were ferried to a Canadian navy ship and would likely be transferred to Bermuda after the search, von Hagn said.
It wasn't known if all 31 crew on the Leader L abandoned ship before it sank. According to initial crew reports, sailors heard a loud cracking sound and just 45 seconds later the ship went down in deep waters, von Hagn said.
The sinking came hours after the Leader L placed a distress call saying that a 45-foot steel hull plate had come loose and was flooding the hold.
The message said the vessel carried two lifeboats that could carry 20 people each and four life rafts, but the ship apparently sank quickly in the high seas, heavy rain and strong winds.
The water temperature in the area was about 70 degrees, warm enough to allow someone to survive up to 26 hours, officials said. Seas were 10-12 feet and winds were 10-14 knots.
Four Sea King helicopters were operating from a five-vessel Canadian task force that had been en route to military exercises in the Caribbean.
U.S.-based rescue crews normally cover the area of the Atlantic where the ship sank, but Canadian forces took charge because they were closest.
A Liberian-flagged cargo ship, Knock Stocks, assisted in the search.
Owned by Leoninus Shipping of Greece, the Panama-registered Leader L was carrying salt from Spain to New York.