Peak Season Surcharge The Ultimate FAQ Guide 1

Peak Season Surcharge: The Ultimate FAQ Guide

Peak season surcharge is yet another important freight term you should know.

So, if you want to learn more, read this guide.

What Is Peak Season Surcharge In International Shipping?

This is the varying extra charges that carriers add for their services during seasons of peak demands.

The fluctuating surcharges are common during summer, before winter and Chinese’s New Year.

It is the extra fee add to the basic transport cost.

Peak season

Peak season

Why Do Carriers Apply The Peak Season Surcharge?

  1. When the demand of shipping space goes high the cost of shipping also rises.
  2. Ocean carriers inflate their rates higher to make extra money
  3. During holidays there is an increased demand in shipping services.

  Carriers are forced to employ seasonal employees to meet the demand.

The cost of this extra employees or automation is then passed on to the consumer.

  1. A carrier may apply various surcharges on shipment in order to offset the cost offered for other services or additional handling of the package.
  2. Service level residential charges are meant to punish shippers of high volumes of packages exceeding the acceptable volume per week.

When Do Peak Seasons Happen?

Peak seasons happen during busy shipping periods in the year.

That is, when there are high volumes of packages being shipped.

This makes the cost of shipping to rise.

This   normally begins from mid-August up to October of every year.

They happen several months before holidays such as thanksgiving, Christmas and Chinese New Year.

Sales are usually high in days such as Black Friday and cyber-Monday

During such periods people buy more foods and presents

Is Peak Season Surcharge The Same As General Rate Increase?

Peak Season Surcharge is not the same as General Rate Increase.

Two most common way of adjusting rate by carriers are Peak season surcharge (PSS) and General rate increase (GRI).

PSS are special charges that carriers add on base rates of shipment, due to an increase in demand for shipping space.

This happens majorly during high peak periods. Like Christmas, major sales and thanksgiving.

GRI are additional costs added to shipping services due to an increase in operational costs.

GRI takes place anytime and even during peak season.

Does Peak Season Surcharge Apply To Ocean Freight Only?

No PSS does not apply to ocean freights only. It is applicable to air carriers too.

What Is The Difference Between Peak Season Surcharge And Emergency Bunker Surcharge?

PSS are special charges that carriers add on base rates of shipment, due to an increase in demand for shipping space.

Emergency Bunker Surcharge is the extra charges carriers implement to cushion them against the rising cost of fuel.

Does The Peak Season Surcharge Apply Only To Imports From Asia?

No. the peak season surcharge does not apply to imports from Asia.

It may also apply to some imports from some Africa from countries such as Nigeria, Togo, Ghana and Benin.

They cover additional operational costs experienced during the peak season.

Are Peak Season Surcharge Rates The Same For All Carriers?

No.

PSS are not same in all carriers as each  carrier calculates its PSS.

This depends on size of the goods, how urgent it is to transport, temperature and sensitivity of the goods.

Having an understanding of how the surcharges are calculated by a carrier can help you in determining which carrier to use.

Peak season surcharge

Peak season surcharge

How Is The Peak Season Surcharge Calculated?

The peak season surcharge is calculated by each carrier in terms of from port to port.

This depends on size of the goods, how urgent it is to transport, temperature and sensitivity of the goods .

Can Peak Season Surcharges Be Negotiated?

Yes Peak season surcharge is negotiable though this is not known to many shippers.

This is the best way of reducing the coast of shipment.

This can be used to influenced your choice of one carrier over another.

Is The Peak Season Surcharge Legal?

Yes peak surcharge are legal and are supported by the US shipping act

How Do Carriers Notify Of Peak Season Surcharges?

The carriers propose their intention to increase Peak seasons surcharges with the effective dates.

The additional PSS are assessed by the carriers.

The basic rates remain the same.

Mitigation may come up to stop the increment.

The flexibility of the of the carrier will be determined by the market

How Do I Avoid Or Minimize Peak Season Surcharge?

There are varied ways of avoiding or minimizing peak season surcharge.

  1. Have a better understanding of how shipping surcharges are affecting your shipping cost.
    Find out what options are there that can help you avoid or minimize the surcharges.
  2. As a shipper you can ensure that you have a better understanding of the networks that are ideal for specific packages.
  3. You can negotiate with your other carrier to reduce or waiver the surcharges to your advantage.
  4. You need to understand surcharges and the various types so that you can make an informed decision on how your packages are shipped.
  5. Make use of third-party logistic provider, they can help you prioritize your shipments and other shipping details.
    They will also give you future rates forecasting so that you can plan your shipment.
  6. Combine shipping analysis and re -negotiating contracts with carriers can help minimize shipping expenses.
  7. Avoid transfer of goods from one conveyance to another.
  8. You can order your shipping to be done before or after the peak season.
  9. Always check online for lower adjustment rates on PSS.
  10. Consider having longer transit times for they reduce the risk of the cargo being rolled.

Why Is Proper Planning Important In Combating Peak Season Surcharges?

Proper planning is important in combating peak season surcharge for these reasons;

  • So that you can ship extra packages before the peak season and avoid surcharges
  • Logistics providers can provide you with future rates forecasting and the best strategies to adopt

What Are Some Common Misconceptions About Peak Season Surcharges?

Some common misconceptions about PSS are;

  1. Accessorial charges occur only during the Peak Season Surcharge. The truth is that they occur throughout the year.
  2. The belief that Peak Season Surcharge occur during holiday season.
    After The Chinese New Year, the peak season lasts for one and a half months.
  3. Peak Season Surcharge and peak accessorial charges affect the US only.
  4.  It is not possible to organize for landed coast
  5. Not being keen with carriers and the rates they demand.

 What Other Accessorial Charges Should I Be Wary Of When Shipping During Peak Season?

Accessorial charges are extra charges assessed by a carrier for additional services rendered beyond basic shipment delivery.

They vary between carriers and they can change any time.

These are:

  1. Detention – this is a fee you are charged when a carrier comes to pick a container and finds that you are not ready.
  2. Special Equipment surcharge- It is an extra cost you pay for hanging garments.
    This is because they need special care during transportation.
    Depending on how long the carrier waits you will be charged these waiting charges.
  3. Storage – If shipments have to be stored before delivery, you will be asked to pay storage fee
  4. Demurrage – this is a charge impost on your container for staying at the port longer than the acceptable free time.
  5. Out of gauge surcharge – this is the additional fee for your container that is not within the standard dimensions.

You will be required to pay for the space that is left vacant because no other container can be loaded

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