Want to know how to avoid extra shipping fees in the middle of peak season? Get tips on peak season surcharge and other charges right here.
Around the globe, we all have holidays we celebrate with our nearest and dearest. Feasting on one delicious meal after the other. All of which makes our taste buds spring to life and hum in satisfaction. With these holidays, we also often have a longer shopping list, when we go to the local stores. That entails both exotic foods and presents for all the people we’re going to be spending some much-anticipated time with.
But before we celebrate the holidays, the shipping industry struggles to follow the increased demand of products. A struggle that happens every year, because the stores want to make sure the products are on the shelves before customers come running.
The periods, where stores and companies have a higher demand are also known as peak season. During this season, carriers charge a special fee – the peak season surcharge. If you work in the shipping industry, it’s a surcharge you, without doubt, have already encountered.
Peak season surcharge 101
The peak season surcharge is only applied to imports from Asia. It’s set to help cover the operational costs that carriers face during the peak season. The fee is on top of the already higher base rates, carriers charge during the peak season.
So, when does this infamous peak season begin? That’s where it gets a little tricky. There’s no strict date for when the peak season begins – and it’s heavily dependent on many factors. However, there are a couple of rules of thumb you can follow.
The peak season usually takes place two times a year. One is when the holidays start looming dangerously close for retailers. It already begins in the fall when children and adolescents are going back to school. And it lasts all the way through Black Friday and Cyber Monday. Before all this madness takes place, stores need to be prepared.
The other peak season we have to deal with every year is when the Chinese New Year (CNY) takes place. Because during CNY, most port workers across China are home celebrating the holidays with their family. Something that makes exporting goods a struggle in its own league.
Want to avoid worrying about extra surcharges during peak season? With Container xChange you become flexible and save costs on charges like demurrage and detention. You can also stop fretting about the status of your containers, with the real-time updates on xChange. Want to learn more about xChange and how we can help you save time and money? Click on the banner below and schedule a call with our team.
This year’s peak season
Let’s have a quick look at the first peak season we went through this year. During the Chinese New Year, the peak season lasted a lot longer, than many first thought it would. The season was prolonged because of the heavily increased demand partially caused by the worldwide pandemic.
Many hadn’t expected the high level of demand. Therefore, it came as an even bigger surprise that ports came under so much operational pressure. Particularly those in the US. Something that also led to port congestion, and extra surcharges like demurrage costing the container users.
Let’s have a look at Container xChange’s Container Availability Index (CAx). Here, we can also see when the big influx of containers began arriving in the Port of Los Angeles.
When the value is over 0.5, more containers enter the port than leave. When the value is under 0.5 there’s a deficit of containers entering the port.
In the picture above, you can see the container availability for the first three months of 2021 compared to the same months in 2020. The availability is of 20ft containers.
As of week 5, the container availability began increasing in Los Angeles. An event that coincides with the start of the peak season in the first months of the year.
How do I avoid peak season surcharge?
If you’re going to ship during a peak season, there’s not much you can do other than pay the peak season surcharge. But there are ways for you to minimize the money you spend on peak season surcharges. Here are a few ways:
Planning and more planning
When you ship during peak season, containers can and do get held up. So, before the peak season begins, it’s a good idea to have a clear forecast of what your season will look like. Look at previous years. If you have recurring customers talk to them about the possibility to ship goods before the peak season starts.
It’s also a good idea, for you to prioritize which containers have the goods with the highest priorities. That way you can focus on them and ensure that those boxes are protected.
Consider longer transit times
Again, planning is the keyword. If you’re capable of planning ahead, considering sailings that have longer transit times could be a good option. Because longer transit times also mean less risk of your cargo being rolled.
In the middle of a peak season, the risk of your containers being rolled is higher. If that happens your shipment can easily get held up at port for several days. Making the containers arrive later than with the trip with longer transit times.
Avoid transshipment
Now, that we’re on the topic of cargo being rolled it’s equally important to avoid transshipments when possible. Some carriers rely on transshipments, and outside peak seasons it doesn’t come with as big a risk. But during these seasons, you risk your containers being rolled twice. Once at the first leg, and again at the second leg. Worst case scenario, you’ll have to spend even more money on extra surcharges such as demurrage and detention.
Peak season surcharge and extra fees
If you’ve ever had containers moving goods from Asia during peak season, you’ve most likely felt the worry creeping up your spine:
The peak season surcharge already put a dent in your profits. But that fee isn’t the only charge lurking around the corner. If your containers get rolled or stuck at port, demurrage and detention charges can be your next big issues. And to make the trip even more costly, demurrage and detention can quickly accumulate to more than the worth of the containers themselves.
As we saw earlier this year, the high demand for containers can put the port operations under too much pressure. Making it impossible for them to follow suit with the many containers coming in. However, this year wasn’t the first time the industry faced container shortage during peak season. And it’s safe to say, it won’t be the last.
We know, it’s not always possible to avoid shipping during peak season.
So, imagine that you still shipping in the middle of the peak but only have to worry about the peak season surcharge. What if you didn’t have to worry about the risk of extra fees like demurrage and detention eating away at your profit if something goes wrong?
Well, actually you don’t have to worry about that. Container xChange is here to help you save money on extra charges. As well as minimize the stress of worrying about the container statuses. With Container xChange you’ll always have that information right on your screen.
Beat the surcharges and stress with xChange
You’ve probably struggled with containers stuck in the terminals for an infinitely long time. Port congestion. Shortage of chassisWhat is a chassis? Chassis, in freight & logistics, refers to a skeleton framework with wheels on it used to move containers. It is also called intermodal chassis or container chassis. Similar to ... More. Customs issues. Vessel delays. So many things can unexpectedly make it impossible to stick to the agreed free days.
In the middle of a peak season, it’s even more expensive to ship containers around the world. Something that makes it equally more important for you, as a container user, to know how to avoid extra surcharges.
SOC containers, also known as Shipper Owned Containers, can help you get around these hidden extra fees. With SOC containers you borrow the boxes of a container owner. This saves the container owner money on storage and repositioning. In turn, giving you more free days and low per diem charges.
With SOC containers, there are no carrier owned containers. No hidden fees. No demurrage and detention charges.
Connecting global container logistics, Container xChange makes it easy for you to get started with SOC containers. On the xChange platform, you can find vetted SOC owners, who have boxes where you need them.
And to make it even easier for you to stay on top of your shipments, you can find all the information about the containers, real-time tracking, and sales or leasing offers all in one place on xChange.
Want to know more about SOC containers and how Container xChange can help you? Click on the banner below and book a free call with our expert team.
