Shanghai–South America Ocean Freight Market Review (June 10 – July 10, 2026)
Created on 07.10
Market Overview: Sharp Surge in June Followed by aModerate Correction in Early July
Over the past month, ocean freight rates from Shanghai to South America experienceda complete cycle of rapid escalation followed by a gradual cooling.
Freight rates surged sharply throughout June due to accelerated cargoshipments, vessel capacity reallocation, and multiple surcharge increases,reaching the highest levels in nearly two years. Entering early July, shippinglines deployed additional vessels and temporary extra loaders, while theprevious wave of front-loaded export demand gradually subsided, leading to anoticeable decline in spot freight rates.
However, all-in freight costs (base freight plus Peak Season Surcharge,fuel surcharge, congestion surcharge and other ancillary charges) remainsignificantly above May levels and continue to stay at historically elevatedlevels.
2. Freight Rate Trends
(1) East Coast of South America
(Santos, Buenos Aires and Montevideo – 20GP, SCFI Reference)
June: Continuous Price Rally
Average freight rates for a 20GP container increased from USD4,604/container in May to approximately USD 7,516/container in June,representing a 63% month-on-month increase.
On 18 June, the SCFI Shanghai–Santos freight rate reached USD 8,212 per20GP, the highest level in almost 23 months.
The surge was mainly driven by:
- Shipping lines such as Maersk and CMA CGM introducing Peak Season Surcharges (PSS) of up to USD 2,000 per container;
- Additional Emergency Fuel Surcharges (EFS) and port congestion surcharges;
- Front-loaded exports triggered by anticipated Brazilian tariff adjustments, particularly for coatings, machinery, titanium dioxide and chemical products;
- Carriers reallocating vessels to the more profitable Trans-Pacific trade, reducing weekly South America sailings from three services to two, resulting in severe space shortages.
Early July: Market Correction
By 3 July, the SCFI Shanghai–Santos rate declined to approximately USD7,230 per 20GP, down around USD 740 (9.3%) week-on-week.
Spot freight for titanium dioxide shipments also eased from the June peakof over USD 8,200/container to around USD 7,200/container.
The correction was mainly attributable to:
- Additional sailings introduced by shipping lines;
- Completion of the previous wave of concentrated export shipments;
- Weaker new booking demand and reduced willingness among shippers to pay premium rates.
(2) West Coast of South America
(Including Manzanillo and Angamos)
Freight rates to the West Coast remained relatively stronger and moreresilient than those to the East Coast.
- Mid-June benchmark rates reached approximately USD 5,829 per 20GP, nearly 50% higher than May and the highest level for the same period in recent years.
- During early July, rates softened by less than 10%, with all-in freight costs remaining around USD 5,200–5,600 per 20GP.
The relatively firm market was supported by:
- Continued growth in cross-border e-commerce exports;
- Increasing shipments of renewable energy equipment;
- Persistent shortages of refrigerated containers;
- Slower empty container repositioning compared with the East Coast.
3. Five Key Drivers Behind the Freight Market
1. Global Capacity Tightness
The ongoing Red Sea crisis has forced vessels to divert around the Cape ofGood Hope, extending voyage durations by approximately 15–20 days.
Meanwhile, the strong cargo rush on the Trans-Pacific trade during Juneprompted carriers to shift a significant portion of their fleet toward U.S.routes, reducing effective capacity on South America services by an estimated 30%,which substantially tightened container availability.
2. Multiple Surcharge Increases
Shipping lines implemented successive surcharge increases during the pastmonth.
These included:
- Peak Season Surcharge (PSS) of approximately USD 1,000 per 20GP effective from 4 June;
- Additional PSS increases on West Coast South America announced by Maersk from 10 July;
- Heavy Weight Surcharge (HWS) effective 17 July, adding USD 200 per 20GP for containers exceeding approximately 23 tonnes, which is particularly relevant for titanium dioxide shipments;
- Continued application of Emergency Fuel Surcharge (EFS) and port congestion surcharges.
Consequently, although base freight rates have retreated, total shippingcosts remain relatively high.
3. Persistent Port Congestion
Major South American ports, particularly Santos and Buenos Aires, continueto experience:
- Yard congestion;
- Inland trucking shortages;
- Reduced cargo handling efficiency;
- Vessel waiting times of approximately 7–12 days.
In addition, seasonal exports of soybeans and minerals have slowed therepositioning of empty containers back to Asia, further tightening containersupply in Shanghai.
4. Demand Shift
June witnessed exceptionally strong export demand driven by:
- Anticipated Brazilian tariff adjustments;
- Increased shipments of coatings, titanium dioxide, sulfur-related chemical products, new energy vehicles and construction materials;
- Early procurement ahead of the traditional Latin American purchasing season.
In contrast, export demand moderated during July as:
- Front-loaded shipments were largely completed;
- Chemical shipments related to coatings and phosphate fertilizers entered a seasonal slowdown;
- Shipping lines lowered spot rates to stimulate cargo bookings.
5. Elevated Fuel Costs
Crude oil prices remained volatile due to geopolitical tensions in theMiddle East, keeping bunker fuel costs elevated.
As a result, fuel surcharges continue to provide a firm floor for freightrates, limiting the extent of further market declines.
4. Current Operational Situation
Space Availability
- During mid-June, vessel space for departures within 7–15 days was almost fully booked, with premium space commanding significant surcharges.
- By early July, capacity had improved considerably, and bookings within 7–10 days became readily available.
Transit Time
Typical transit times remain unchanged:
- Shanghai to East Coast South America: approximately 40–45 days
- Shanghai to West Coast South America: approximately 33–38 days
Despite improving capacity, the Red Sea situation has not materiallyshortened overall voyage durations.
Container Type
Reefer containers remain in chronic short supply, with freight premiumsgenerally USD 1,000–1,500 higher than standard dry containers.
Titanium dioxide is almost exclusively shipped in 20GP containers becauseof its high cargo density. Shipments exceeding carrier weight limits aresubject to Heavy Weight Surcharges, increasing total logistics costs.
5. Impact on Titanium Dioxide Exports
Rising Logistics Costs
Titanium dioxide is predominantly exported in 20GP containers.
At the June peak, ocean freight exceeded USD 8,200 per container,increasing logistics costs by approximately USD 300–500 per metric ton comparedwith earlier levels.
Although freight rates have retreated to around USD 7,200 per container inJuly, shipping costs remain more than USD 2,000 per container higher than thoseseen in May.
Export Competitiveness
South American titanium dioxide producers are simultaneously facingelevated sulfur prices and high ocean freight costs for imported raw materials.
Despite increased logistics expenses, Chinese exporters continue tomaintain a cost advantage over many regional suppliers.
The recent easing in freight rates also provides exporters with greaterflexibility to adjust FOB quotations, potentially supporting additional demandfrom Brazil, Chile and other South American markets.
Shipment Planning
The severe space shortage experienced in June forced exporters to securebookings well in advance.
With vessel space now improving, exporters are able to arrange shipmentsmore flexibly, reducing inventory pressure and working capital requirements.
At the same time, careful control of container payloads has becomeincreasingly important in order to avoid Heavy Weight Surcharges.
6. Short-Term Outlook (Mid-to-Late July)
- Freight rates on South America routes are expected to remain volatile but at relatively elevated levels, with limited downside potential.
- West Coast South America is likely to outperform the East Coast, supported by stronger demand from cross-border e-commerce, renewable energy equipment and cold-chain cargo.
- As Latin American seasonal procurement gradually resumes during August, together with continued carrier capacity management, freight rates may rebound again from late July into early August.
- Peak Season Surcharges, congestion surcharges and Heavy Weight Surcharges are expected to remain in place in the near term, keeping overall shipping costs well above the average levels recorded during the first half of 2026.