Peak Season Surcharges / General Rate Increases – What are they and when do they apply?
Peak Season Surcharges (PSS) and General Rate Increases (GRI) are charges imposed by steamship lines during times of high demand or rising costs. The amounts of these fees can vary greatly by carrier as they are dependent on each carrier’s own projected supply and demand.
PSS are often issued by carriers during the summer months (June-November) because demand for container space on vessels is high. The demand is greater during these months due to retailers stocking up product to be ready for sale prior to the holiday season. As a result, carriers have higher operating costs to place more vessels and crew on the water. These charges typically apply across all routings for a particular carrier but will be mitigated once the peak season is over.
Carriers set their GRI amounts based on supply and demand of a particular routing at any point during the year as they deem necessary. GRIs are typically rolled into the carrier’s ocean freight rate after the month the GRI went into affect. Whether the whole GRI amount or partial GRI amount is added to their rate is at the discretion of the carrier.
- Example: If carriers are struggling to fill their vessels after a GRI goes into effect, they may mitigate the GRI down to a lower level in an effort to obtain more business. Adversely, if carriers are still filling their vessels after the GRI is placed, they have no reason to mitigate the charge down and will likely absorb the full GRI into their following month’s ocean freight rate.
At the end of the day, the rates and surcharges offered by the carriers are done so at their discretion. Carriers will not offer the same rates to everybody. They will rate their services based on current costs, contract details, business history, and/or potential business.
If you have questions, please contact Superior Freight Services, Inc. at 800.298.4305 or superior@supfrt.com
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