Peak Season Surcharge: How B2B Enterprises Can Effectively Respond

Whenever the PSS (Peak Season Surcharge) is mentioned, many B2B enterprise leaders will frown. What exactly is this fee? Why does it "come uninvited" during the peak season of logistics?

In the busy channel of international trade, B2B enterprises often encounter a headache-PSS peak season surcharge. This seemingly insignificant but far-reaching fee often makes enterprises stretched in logistics cost control. Today, we will take a deep look at the meaning of the PSS peak season surcharge, the reasons why shipping companies charge it, and how B2B enterprises can respond to this challenge to ensure smooth logistics and controllable costs.

The meaning of PSS peak season surcharge

PSS, or Peak Season Surcharge, is a surcharge charged by shipping companies during the peak season of freight to compensate for the cost increase caused by increased transportation demand due to strong market demand, tight shipping space, and increased transportation costs (such as increased ship rents, increased fuel prices, and additional costs caused by port congestion, etc.). The purpose of charging Peak Season Surcharge is to balance the increased operating costs during the peak season by charging surcharges, and to ensure the company's profitability and service quality. It is like a compulsory course in the "peak season", which allows companies to enjoy the market dividends while also having to face the reality of increased costs.

Why do carriers charge a peak season surcharge (PSS)?

Supply and demand relationship impact

During the peak freight season, import and export trade activities are frequent, and the demand for cargo transportation increases significantly, while the ship capacity is relatively fixed in the short term and cannot quickly meet all transportation needs, resulting in a shortage of space. Shipping companies control the volume of cargo by charging PSS and give priority to meeting the needs of customers who are willing to pay higher fees.

Cost increase factors

Including rising ship rents, rising fuel prices, port congestion, etc., these factors have led to increased operating costs for shipping companies, so PSS is needed to make up for this part of the additional costs.

During the peak season, the demand for cargo transportation increases significantly, while the ship capacity is relatively fixed, resulting in a shortage of space. In order to balance the supply and demand relationship and ensure service quality, shipping companies have to control the volume of cargo by charging PSS and give priority to meeting the needs of customers who are willing to pay higher fees. At the same time, the increase in ship rents, fuel prices, and port congestion caused by the peak season are also important reasons for shipping companies to levy PSS.

When is the peak season surcharge usually levied?

The levy time of the peak season surcharge is usually closely linked to the peak season of freight. For example, on the eve of the consumer peak season such as Christmas Eve and Black Friday, the European and American markets have a strong demand for Asian-made goods, and a large amount of goods need to be shipped to Europe and the United States. At this time, shipping companies often levy PSS. The specific collection time and conditions may vary depending on the shipping company and route. It is recommended to learn about the specific charging time and conditions from the shipping company or freight forwarder in advance. Therefore, B2B companies need to pay close attention to market trends and plan logistics plans in advance to meet the challenges of peak season surcharges.

How to calculate the peak season surcharge?

The calculation method of PSS varies depending on factors such as shipping companies, routes, and types of goods. Generally, a certain amount of fees is charged per container, or calculated according to the weight or volume ratio of the goods. The calculation method of PSS is usually based on US dollars as the billing unit, and is charged per TEU (Twenty-foot Equivalent Unit). This means that the fee will be calculated based on the quantity and volume of the goods, and the specific amount depends on the specific policies of the route and the shipping company.

In order to obtain the most accurate PSS calculation method, B2B companies should communicate directly with shipping companies or professional third-party logistics service providers (such as Chinadivision) to obtain the latest charging standards and calculation methods.

PSS is not a "master key": scope and limitations

PSS does not apply to all modes of transportation, but mainly applies to sea transportation, especially container transportation. Because sea transportation occupies a dominant position in international trade, and the phenomenon of tight space and rising costs is particularly obvious during the peak season. In contrast, although air transportation, land transportation and other modes of transportation are also affected by the peak season, due to the differences in their transportation methods and cost structures, they usually do not impose surcharges that are exactly the same as PSS.

How shippers respond: strategies and preparations

Faced with PSS peak season surcharges, B2B companies should not passively accept them, but should actively respond. Here are some suggestions:

Plan ahead: Pay close attention to market trends, understand the peak season time and PSS charging standards of different routes in advance, formulate a reasonable cargo transportation plan, and prepare in advance to avoid being affected by sudden increases in costs.

Diversified logistics solutions: Cooperate with professional third-party logistics service providers to explore a variety of logistics solutions, such as air transport, land transport, etc., to disperse the pressure of the peak season of sea transportation.

Cost control: Reduce transportation costs and reduce the impact of PSS on profits by optimizing packaging design and improving loading efficiency.

Risk management: Establish a risk warning mechanism to prepare for possible logistics delays, cost increases and other problems in advance.

Join hands with Chinadivision: Create a new future for logistics

As a professional third-party logistics service provider, Chinadivision is well aware of the challenges faced by B2B companies in the process of international logistics. We have rich industry experience, strong resource integration capabilities and a professional customer service team, and can provide B2B companies with comprehensive and customized logistics solutions. Whether it is sea, air or land transportation, we can provide you with the best, most economical and most reliable logistics services.

If you still have questions about the PSS peak season surcharge, or want to seek more professional logistics solutions, please feel free to contact Chinadivision. We will wholeheartedly answer your questions and create a new future for logistics!