What is peak season surcharge?
Peak Season Surcharge, or PSS, is the additional charge imposed on the base freight rate or regular shipping fees when there is high demand in the supply chain network. It is usually charged during peak season and is a temporary freight rate.
Peak seasons are specific periods during the year when maximum freight is transported and shipped. This often happens around the holiday season, when global eCommerce shipping is higher. Peak season can vary from region to region, depending on the national holidays of a country.
Major retail events lead to peak season, which includes:
- Black Friday & Cyber Monday
- Thanksgiving & Christmas
- Chinese New Year, etc.
Why is Peak Season Surcharge Applied by Carriers
During peak season, there is often a high demand and low supply. This means pressure on the existing resources of the supply chain, high congestion in warehouses & ports, less manpower or labor, and delays in the delivery of goods.
All of this with a high shipment volume leads to inflated freight costs.
To tackle the shipment volume during this time, carriers levy an additional fee to compensate for the stress of the supply chain and available resources. This is peak season surcharge.
Most carriers add peak season surcharges ahead of the peak season, leaving the shippers with no choice but to move ahead with the blown-up costs.
How to Save Peak Season Surcharge
Not shipping during the peak season is one of the top tips. But, if you really must, plan your inventory and shipments in advance to avoid the peak season rush.
Before peak season
- Ship before the peak season starts or after it has eased up for specific routes.
- Divide your larger freight into smaller shipments and send them in advance.
- If shipping eCommerce goods, stock up your inventory beforehand based on smart predictions by observing customer order history to avoid last-minute shipping.
During peak season
- Look for routes with less traffic or shipment volume.
- Consolidate several different shipments into a container to reduce multiple per package charges.
- Unload freight at a less-congested port and choose intermodal transportation for last-mile delivery.
Peak Season Surcharge v/s General Rate Increase
General Rate Increase is another rate adjustment that is common in ocean freight. It refers to additional cost added to the base freight rate when the operational costs go up for a carrier.
Peak season surcharge (PSS) and General rate increase (GRI) are often confused together.
While PSS is subject to demand-supply chain fluctuations and peak season timing; GRI is not subjected to peak times. It can be applied throughout the year, depending on the operational expenses of the carrier.
Terms related to Peak season surcharge
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