In the second quarter of 2026, the global ocean freight market experienced an unexpectedly strong surge. According to data from the Shanghai Shipping Exchange on June 18, the SCFI index rose for eight consecutive weeks to 3121.69 points, with a single-week increase of 4.57%, erasing all first-quarter losses and hitting a new year-to-date high. The rate increases covered almost all major routes, including the US, Europe/Mediterranean, South America, and Australia/New Zealand, with uneven distribution. The US West Coast rate jumped $582 per FEU in one week, while the Santos route in South America exceeded $8,212 per TEU.
For textile exporters, rising freight costs mean further erosion of already thin profit margins. China Customs data shows that in the first five months of 2026, the country's textile and apparel exports reached only $116.73 billion, up a mere 0.1% year-on-year, far below the 11.8% growth rate of total national exports. The textile industry did not benefit from the overall export growth but had to bear the cost pressure from soaring freight rates.
Structural Features of the Rate Surge This round of price increases is not a simple seasonal fluctuation but the result of multiple overlapping factors. From a structural perspective, the US routes showed the most prominent increases, with the US West Coast FEU rate reaching $5,683 and the US East Coast approaching $7,000. Peak season surcharges commonly range from $1,000 to $1,500. This means the cost of a 40-foot container from China to the US West Coast has exceeded $7,000, potentially accounting for over 30% of the cargo value for low-unit-price textile products.
The South American route also rose sharply, with the Santos route reaching $8,212 per TEU, a weekly increase of 8.18%. In contrast, intra-Asia routes showed mixed performance: Japan rates were flat, Southeast Asia edged up slightly, but the Korea line jumped $27 in a single week, indicating that the price increase is spreading from long-haul to short-sea routes. This across-the-board upward trend leaves textile companies with almost no low-cost route options to hedge against rising costs.
The Ripple Effect of Suez Canal Surcharge Hikes In addition to the rise in ocean freight, the Suez Canal Authority announced a 12% increase in transit surcharges for most vessel types, effective July 15. This adjustment impacts textile exports in two ways: first, it directly raises logistics costs for shipments to Europe and the Mediterranean via the canal; second, it may prompt shipping lines to reassess route configurations, potentially pushing up rates on other routes.
Notably, the surcharge increase comes at a time when canal traffic has already recovered significantly. Data from the Egyptian Central Agency for Public Mobilization and Statistics shows that in April 2026, the total number of vessels passing through the Suez Canal increased by 14% year-on-year, with oil tanker numbers surging by 28%. Canal revenue reached its highest monthly level since early 2024. While the authority describes the surcharges as temporary and market-adjustable, the decision will undoubtedly add to already elevated shipping costs.
Real-World Impact on Textile Exporters Textile and apparel exports grew only 0.1% in the first five months, compared to 11.8% growth for total national exports. This gap of over 10 percentage points means the textile industry is losing share in overall exports while bearing the same freight cost pressures as other sectors. For low-unit-price products such as conventional fabrics, greige goods, and basic apparel, freight increases can directly lead to order losses or force companies to abandon shipments.
From the perspective of industrial clusters, small and medium-sized enterprises in Keqiao, Shengze, and other textile hubs face very limited options. Some companies are attempting to reduce logistics costs through consolidation or switching to the China-Europe Railway Express, but rail capacity is limited and rates are also rising. More concerning is that if freight rates remain elevated, overseas buyers may shift orders to Southeast Asian or South Asian countries with lower logistics costs, posing a long-term threat to China's textile export competitiveness.