In the second quarter of 2026, the global ocean freight market experienced an unexpectedly strong price surge. Data from the Shanghai Shipping Exchange on June 18 shows that the SCFI composite index has risen for eight consecutive weeks, reaching 3121.69 points, with a weekly gain of 4.57%, hitting a new high for the year. This increase completely erased all declines from the first quarter, catching foreign trade companies off guard.
Notably, this round of price increases is not limited to specific routes but covers major global shipping lanes. The freight rate for a 40-foot container on the US West Coast route has climbed to $5,683, with a weekly increase of 11.41%. The US East Coast rate is approaching $7,000, currently at $6,873. European base port rates have exceeded $3,158 per TEU, while the Mediterranean route remains elevated at $4,260. The Santos route in South America leads the pack at $8,212 per TEU, up $621 in a single week.
Drivers: Supply-Demand Imbalance and Surcharges
The core drivers of this freight surge are multifaceted. Although the Strait of Hormuz has reopened after US-Iran negotiations, security concerns in the Red Sea region persist, and vessels continue to take the longer Cape of Good Hope route. This has kept effective global capacity tight, especially on Asia-Europe routes, where space constraints remain unresolved.
Meanwhile, major shipping lines have begun imposing peak season surcharges from June, with US-bound surcharges typically ranging from $1,000 to $1,500. The Suez Canal Authority has also announced a 12% increase in transit surcharges for most vessel types, effective July 15. Container ships retain the 12% surcharge, but dry bulk carriers see an increase from 10% to 22%, and crude oil tankers from 25% to 37%. These cumulative costs have increased single-shipment expenses by 30% to 50% compared to early 2026.
Data from the Suez Canal shows that in April 2026, total vessel transits reached 1,182, up 14% year-on-year, with oil tanker transits surging 28%. Canal revenue hit $419 million, up 27% year-on-year, the highest monthly figure since early 2024. This indicates that even as some routes resume normal operations, canal pricing policies continue to tighten.
Textile Exports: Volume Growth Without Profit Growth
According to China Customs, total merchandise exports grew 11.8% year-on-year in the first five months of 2026. However, textile and apparel exports only inched up 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 data reveals the textile industry's dilemma: while the overall export market is growing, the textile sector is essentially stagnant. Companies are not benefiting from the export boom but are absorbing the full impact of rising freight costs. For a typical US West Coast container, the freight increase exceeds $2,000 compared to early 2026. For textile orders with profit margins generally below 5%, this means the entire profit margin is wiped out.
For SMEs in textile hubs like Shengze, Keqiao, and Nantong, current freight levels are approaching the breakeven point. Some companies report that if customers refuse to share the freight burden, they would rather cancel orders than take losses. This cautious sentiment is affecting order intake in late Q2 and Q3.