In the second quarter of 2026, the global ocean freight market experienced an unexpected surge, defying expectations as the Strait of Hormuz reopened. The Shanghai Shipping Exchange's SCFI index rose for eight consecutive weeks, reaching 3121.69 points, a single-week increase of 136.47 points or 4.57%, erasing all losses from the first quarter. This rally covered all major routes, including transpacific, Europe-Mediterranean, South America, Australia-New Zealand, and even intra-Asia lanes. The US West Coast rate for a 40-foot container surged 11.41% to $5,683, while the US East Coast rate jumped 8.73% to $6,873, approaching the $7,000 mark. Europe base port rates rose 3.07% to $3,158 per TEU, and the Santos route in South America climbed 8.18% to $8,212 per TEU. In addition to rate increases, major carriers have imposed peak season surcharges of $1,000-$1,500 on US-bound containers since June.
Suez Canal Surcharges Add to Woes
The Suez Canal Authority announced new transit surcharges effective July 15, raising fees by 12% for most vessel types. Container ships will continue to pay a 12% surcharge, but dry bulk carriers face a sharp increase from 10% to 22%. Loaded crude and product tankers see their surcharge jump from 25% to 37%, while empty tankers go from 15% to 27%. LPG and chemical tankers rise from 20% to 32%, and LNG carriers from 7% to 19%. This move comes as canal traffic recovers: Egyptian statistics show 1,182 vessels transited in April 2026, up 14% year-on-year, with oil tanker transits surging 28%. Canal revenue reached $419 million in April, the highest since early 2024.
Textile Exporters Bear the Brunt
China's total exports grew 11.8% in the first five months of 2026, but textile and apparel exports managed only a 0.1% increase to $116.73 billion. Textile exports rose 1.7% to $59.48 billion, while apparel exports fell 1.6% to $57.24 billion. This means textile exporters are not benefiting from the broader trade recovery but are fully exposed to soaring freight costs. A single-week jump of over $500 per FEU on the US West Coast can wipe out the typical 3-5% profit margin on textile orders. For companies that have already accepted orders, the choice is either to pay the higher freight or face contract penalties.