Shipping, Express Delivery Shine in Q2 as Oil Costs Weigh on China's Transport Sector

China's transportation sector experienced a divergence in performance during the second quarter of 2026, with strong profit growth in shipping and express delivery failing to offset the impact of high oil prices on airlines, leading to an overall drop in profitability. According to a research note from Guojin Securities, the sector's combined net profit fell 15.4% year-over-year in Q2, even as revenues grew.

Sector Performance Overview

For the first half of 2026, China's transportation sector saw modest growth, with total revenue rising 2.8% year-over-year to ¥1.78 trillion and net profit attributable to shareholders increasing 2.7% to ¥97.6 billion. This growth was primarily driven by the shipping, aviation, and airport segments.

The second quarter painted a different picture. While revenue continued to grow, net profit fell to ¥40.5 billion, a 15.4% decrease from the same period last year. Guojin Securities attributed the decline to weaker performance in the aviation, logistics, and highway sub-sectors.

Shipping and Express Lead the Pack

The shipping industry was a standout performer, benefiting from heightened geopolitical tensions in the Middle East. These tensions led to rerouting and lower vessel efficiency, which, combined with increased risk premiums, pushed freight rates higher. Key performance indicators for the first half include:

• Oil Tankers: Clean tanker rates (BCTI TC7-TCE) jumped 56.6% year-over-year, while VLCC tanker rates (BDTI TD3C-TCE) surged by 697.9%.
• Overall Shipping: The segment's H1 revenue grew 8% to ¥244.1 billion, with net profit climbing 16% to ¥32.0 billion.

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The express delivery market also showed robust health as intense price competition eased. In the second quarter, average price per parcel rose 3.5% year-over-year to ¥7.64, while business volume grew 4.2%. This improved pricing power contributed to significant profit growth for the segment.

Airlines Face Headwinds from High Oil Prices

In contrast, the aviation industry struggled under the weight of surging fuel costs. The seven major passenger airlines saw their combined net loss widen to ¥6.7 billion in the first half, despite a 10% increase in collective revenue. High oil prices were cited as the primary cause for the pressure on profits.

Passenger traffic also showed signs of weakness in the second quarter, with total volume declining 4.4% year-over-year. However, air cargo remained a bright spot, with demand supported by high-value goods like AI hardware and high-end manufacturing exports. Dongfang Logistics, for example, reported a 27% rise in H1 revenue and a 10% increase in net profit.

Looking ahead, Guojin Securities remains positive on the shipping sector, expecting the strong Q2 trend to continue. The firm also recommends the aviation sector, arguing that the impact of oil prices has been fully priced in and that supply-demand dynamics are set to improve due to constraints on aircraft manufacturing.