In the second quarter of 2026, global ocean freight rates experienced the strongest post-pandemic surge. According to the Shanghai Shipping Exchange, the SCFI index rose for eight consecutive weeks to 3121.69 points, with a weekly gain of 4.57%, erasing all declines from the first quarter and hitting a new yearly high. At the same time, the Suez Canal announced a 12% surcharge increase for most vessel types, effective July 15. For the textile export industry, which operates on thin margins, this is an additional burden.
Background
The rate hike covers all major global routes with no obvious price trough. The US routes led the surge: US West Coast rates reached $5,683/FEU, up 11.41% week-on-week; US East Coast rates approached $7,000/FEU, up 8.73%. European and Mediterranean routes also rose, with North Europe at $3,158/TEU and the Mediterranean at $4,260/TEU. The Santos route in South America exceeded $8,200/TEU, up 8.18%. Near-sea routes showed mixed performance: Japan routes were flat, while Korea routes jumped $27 to $188/TEU, signaling that price increases are spreading to shorter distances.
In addition to base rates, major shipping lines have imposed peak season surcharges since June, with US routes typically adding $1,000-$1,500 per container. The Suez Canal Authority announced a 12% surcharge increase for most vessel types from July 15. Container ships will continue to pay a 12% surcharge; dry bulk carriers will see a rise from 10% to 22%; fully loaded crude oil tankers from 25% to 37%; and car carriers northbound from 14% to 26%. The authority stated these surcharges are temporary and subject to adjustment based on market conditions.
The increase in Suez Canal traffic is the direct driver of this surcharge. In April 2026, 1,182 vessels transited the canal, up 14% year-on-year; among them, 529 were oil tankers, up 28%. Canal revenue reached approximately $419 million in April, up 27% year-on-year, the highest monthly income since early 2024. The canal had seen declining traffic due to Houthi attacks in the Red Sea, but disruptions in the Strait of Hormuz due to the US-Iran conflict redirected some vessels to Red Sea routes, indirectly boosting Suez Canal activity.
Industry Impact
According to customs statistics, China's total foreign trade in goods for the first five months of 2026 reached 20.68 trillion yuan, up 15.3% year-on-year, with exports growing 11.8%. However, in the textile sector, exports of textiles and apparel were only $116.73 billion, a mere 0.1% increase. Textile exports grew 1.7% to $59.48 billion, while apparel exports fell 1.6% to $57.24 billion. This means the textile industry has not benefited from the overall export growth but is fully exposed to rising freight costs.
The impact of soaring freight rates on textile exporters is direct and severe. For a 40-foot container on the US West Coast, the rate has risen from about $4,000 at the start of the year to $5,683, plus $1,000-$1,500 in peak season surcharges, bringing the total cost per container close to $7,000. For textile orders with typical profit margins of 3%-5%, the freight increase often exceeds the entire profit. Many small and medium-sized exporters face a dilemma: accept orders with high freight costs and see profits vanish, or decline orders and lose market share.
From the perspective of industrial clusters, textile hubs like Keqiao, Shengze, and Nantong report that while inquiry volumes have rebounded in 2026, the actual conversion rate has dropped, mainly due to freight uncertainty and high costs. Some companies are negotiating cost-sharing mechanisms with clients or shifting to near-sea markets with more flexible delivery times. However, near-sea routes are also showing signs of price increases: Southeast Asia rates edged up $7 to $689/TEU, and Korea rates jumped $27, indicating that price troughs are disappearing.