The global ocean freight market is experiencing a surge beyond expectations. According to data from the Shanghai Shipping Exchange on June 18, the SCFI index has risen for eight consecutive weeks, closing at 3121.69 points, hitting a new year-to-date high. The weekly increase of 4.57% means that for every week an exporter delays shipment, they face hundreds or even thousands of dollars in additional container costs.
Rates Soar Across the Board, US Routes Lead the Surge
No route is spared from this price hike. The US West Coast 40-foot container rate soared to $5,683, jumping $582 in a single week, a weekly increase of 11.41%. The US East Coast rate approached $7,000, reaching $6,873 with an 8.73% weekly gain. European base ports reported $3,158/TEU, while the Mediterranean route hit $4,260/TEU, both rising over 2%. The Santos route in South America surged to $8,212/TEU, climbing 8.18% in one week.
Intra-Asia routes showed a divergence. Japan's Kanto and Kansai routes remained flat at around $330/TEU. Southeast Asia edged up $7 to $689/TEU. But the Korea route jumped $27 to $188/TEU, signaling that intra-Asia price hikes are starting. For textile exporters focused on Southeast Asia, Japan, and South Korea, this wave of increases is not a distant concern.
Suez Canal Adds Surcharges, Transit Costs Rise 12%
As the market digests the freight spike, the Suez Canal Authority announced an increase in transit surcharges effective July 15. Container ships will continue to pay a 12% surcharge. But dry bulk carriers see their surcharge rise from 10% to 22%. Laden crude oil tankers face a hike from 25% to 37%. Car carriers northbound will pay 26%, up from 14%.
This adjustment comes against a backdrop of rising canal traffic. Egypt's statistics agency reported that 1,182 vessels transited the Suez Canal in April 2026, up 14% year-on-year. Among them, 529 were oil tankers, a 28% increase. The canal generated $419 million in revenue that month, up 27% year-on-year, the highest since early 2024. After the Strait of Hormuz disruption due to US-Iran tensions, some vessels shifted to Red Sea routes, indirectly boosting Suez Canal utilization. The authority calls the surcharges "temporary," but the market expects them to persist in the near term.
Textile Export Margins Squeezed from Both Sides
China's General Administration of Customs reports that total merchandise exports grew 11.8% in the first five months of 2026. But textile and apparel exports inched up only 0.1% to $116.73 billion. Textile exports reached $59.48 billion, up 1.7%, while apparel exports fell 1.6% to $57.24 billion.
This contrast highlights the textile industry's predicament: the overall trade pie is growing, but the textile slice is nearly stagnant. Companies are not enjoying the export boom but are bearing the full brunt of freight cost increases. For a US West Coast container, the base rate has exceeded $5,600. Adding peak season surcharges of $1,000 to $1,500, the total cost per container could exceed $7,000. For low-margin textile orders, freight costs may account for over 30% of the cargo value.
Industry Impact: Which Orders Are Under Pressure?
The impact varies by product category. High-value functional fabrics and branded apparel orders are less sensitive to freight costs. But conventional grey fabrics, home textiles, and mass-market garments feel the pinch most acutely. A fabric trader in Shengze reported that South American clients are already asking for price renegotiations, citing the rapid freight increase as unsustainable for end consumers.
By route, US line hikes hit apparel exports hardest, as the US remains China's single largest apparel market. European route increases affect fabric and home textile categories, particularly impacting industrial clusters in Shaoxing and Nantong. The South American surge may dampen order growth from emerging markets, which had been a key growth driver since 2025.