In the second quarter of 2026, the global ocean freight market experienced an unexpected surge. Contrary to market expectations of a rate decline after the Strait of Hormuz reopened, freight rates continued to climb, with the SCFI index rising for eight consecutive weeks to 3121.69 points, a single-week increase of 4.57%. For textile exporters operating on razor-thin margins, every shipment now faces rising costs that eat into already limited profits.
Comprehensive Rate Hikes Across All Routes
The current round of price increases is not limited to individual routes but covers all major global shipping lanes. According to data from the Shanghai Shipping Exchange on June 18, the US West Coast rate reached $5,683 per FEU, up $582 in a single week, an 11.41% weekly increase. The US East Coast rate hit $6,873 per FEU, approaching the $7,000 mark, with an 8.73% weekly gain. As the primary shipping corridors for Chinese textile exports, these increases directly raise overall export costs.
South American and Australia-New Zealand routes also showed strong gains. The Santos, Brazil route reached $8,212 per TEU, up $621 week-on-week, an 8.18% increase. The Australia-New Zealand route hit $1,808 per TEU, up $72. While intra-Asian routes saw smaller increases overall, the South Korea route jumped $27 to $188 per TEU, signaling that pricing pressure is spreading to regional lanes. Only the Japan routes (Kanto and Kansai) remained flat.
Suez Canal Surcharges Add to the Burden
Beyond freight rate increases, the Suez Canal Authority announced it would raise transit surcharges effective July 15. Most vessel types will see a 12% surcharge increase. Container ships will continue to pay 12%, while dry bulk carriers will see surcharges rise from 10% to 22%. Although textile exports primarily rely on container shipping, the general increase in canal surcharges will indirectly push up overall freight costs for all routes transiting the Suez Canal through carrier cost-pass-through mechanisms.
The Suez Canal Authority characterized this surcharge increase as a temporary measure, but the pricing confidence stems from recovering traffic volumes. In April 2026, total vessel transits reached 1,182, up 14% year-on-year, with oil tanker transits surging 28%. Monthly canal revenue hit approximately $419 million, up 27% year-on-year, the highest monthly figure since early 2024. The authority is clearly capitalizing on geopolitical shifts to reset pricing.
Textile Export Growth Stalls as Freight Squeeze Bites
China Customs data shows that from January to May 2026, national textile and apparel exports totaled $116.73 billion, up only 0.1% year-on-year. Textile exports alone reached $59.48 billion, up 1.7%, while apparel exports fell 1.6% to $57.24 billion. During the same period, China's total merchandise exports grew 11.8%, meaning textile and apparel exports significantly underperformed the broader export economy.
This means textile exporters are neither benefiting from the overall export growth nor shielded from rising freight costs. For a small order with a profit margin of perhaps a few hundred dollars, a $582 weekly increase on the US West Coast route alone can wipe out profits entirely. Freight costs have become a critical variable in export decision-making.