What Are Peak Season Surcharges (PSS)?
There are many factors that affect shipping costs such as package weight and dimensions, distance, type of shipping service, and demand for shipping services. Demand is uneven throughout the year: there are months when shipping carriers find themselves busier than usual. Since their operational costs are higher during these busy months, carriers tend to apply the so-called peak season surcharges.
Shipping carriers usually start charging a peak season surcharge (PSS) during busy season when they are nearing their full capacity. There generally are two peak seasons during the year that may affect shipping rates. One occurs during the holiday season in Western countries, starting in the fall and lasting all the way through Christmas or New Year’s. The other is around the Chinese New Year, when a lot of workers in China are given time off.
Sometimes, however, periods of high demand occur unexpectedly. The COVID-19 pandemic, for example, has had a huge impact on the global economy, including international shipping. The number of passenger flights went down drastically, reducing cargo capacity since most passenger flights were carrying some freight. In addition, carriers had to minimize human contact and provide time off to workers who got infected with COVID-19. At the same time, the number of residential deliveries went up as consumers were stuck at home. This led to carriers applying surcharges that they qualified as PSS.
Peak season surcharges should not be confused with the General Rate Increase (GRI). GRI reflects a general rise in operational costs that inevitably occurs every year. It is usually announced around October and is applied in January. Unlike the peak season surcharges that only stay in place until the end of the peak season, GRI stays in place permanently or, to be more precise, until the next general rate increase.
Each of the major shipping carriers has its own approach to applying peak season surcharges. For example, the United States Postal Service (USPS) increases the shipping rates during the holiday season, when people make the most of Black Friday deals and ship Christmas presents to their family and friends. The peak season surcharges are usually announced in August, come into effect in early October, and remain in place until late December.
The rate increase usually applies to domestic competitive parcels (First-Class Package Service, Priority Mail, Priority Mail Express, Parcel Select, USPS Retail Ground) but does not affect international services. Some years the peak season surcharges affect only commercial parcels, and some years both commercial and retail parcels are affected.
Like the USPS, FedEx applies peak surcharges to packages shipped during the holiday season. They are announced in August, come into effect in October, and usually last until the mid-January. Unlike the USPS, FedEx applies surcharges to some of its international services, namely FedEx International Ground. FedEx can also apply surcharges during other peak seasons.
UPS (United Parcel Service) applies peak demand surcharges depending on the origins and destinations of packages. For example, the rate increase typically affects packages originating in the Asian region during the period around the Chinese New Year. As a rule, there’s a whole list of peak/demand surcharges so you should check out the UPS website to learn whether any of them apply to your parcel.
While you can’t avoid peak season surcharges completely, you can reduce your shipping costs by comparing different shipping services and carriers to choose the best option. PostageMaker’s shipping calculator will help you pick the best shipping service for your budget.