You thought the shipping quote was final, but then a congestion surcharge shows up and eats into your margin. Sound familiar? These extra fees can wreck budgets and schedules if you don’t see them coming. Let’s discuss what congestion surcharges mean, why they happen, and how to stay one step ahead.
What is a congestion surcharge?
A congestion surcharge is an additional fee carriers charge when port operations slow down due to crowding or inefficiency. These delays drive costs through extended equipment use, fuel consumption, and labor downtime. You might also see terms like terminal congestion fee, port congestion surcharge, or PCS in shipping. They all refer to the same issue: When cargo movement stalls at the port, someone should pay the price.
How does it affect your business?
Congestion fees typically range from $150 to $1,250 per TEU. For high-volume shipments, these costs escalate quickly. But the impact goes beyond your budget. Delays at the port can trigger inventory shortages, missed deadlines, and disruptions throughout your supply chain.
Why do port congestion surcharges happen?
Congestion doesn’t happen in a vacuum. Here’s what usually causes it:
- Seasonal spikes in cargo volume, especially during peak times like the holiday rush
- Geopolitical events, such as the Red Sea crisis
- Labor strikes, weather-related shutdowns, or unexpected port closures
- Infrastructure bottlenecks, particularly at high-traffic terminals
Take 2020 as an example. Carriers like CMA CGM introduced port congestion surcharges due to severe backlogs in Los Angeles, with fees reaching up to $1,000 per container.
Who pays these surcharges?
In most cases, the cargo owner covers the congestion fees. Depending on the contract, that responsibility usually falls on the shipper or the consignee. In some cases, the cost gets split or absorbed by logistics partners.
Unclear contract terms often cause frustration. When no one defines surcharge responsibility upfront, the invoice becomes an unpleasant surprise.
Congestion surcharge vs. other shipping fees
| Fee Type | Purpose | Who Pays |
|---|---|---|
| Congestion Surcharge | Covers delays from port overcrowding | Shipper or Consignee |
| Demurrage | Applies when containers stay too long | Shipper |
| Detention | Arises from late container returns | Shipper |
| Peak Season Surcharge (PSS) | Applies during high-demand periods | Shipper |
| NYC Congestion Pricing surcharge | Toll for entering Manhattan by Vehicle | Trucker/Carrier |
Tips: The NYC congestion pricing surcharge has nothing to do with shipping delays. It’s a city-imposed road toll that starts in 2025 for vehicles entering central Manhattan. Still, it impacts logistics costs for companies moving goods through New York.
How to avoid or minimize congestion surcharges?
You can’t control global events, but you can ship smarter. Try these practical steps:
- Book early during peak seasons to secure space and avoid delays
- Use Shipper-Owned Containers (SOCs) to sidestep demurrage and detention fee
- Choose less congested ports such as Houston instead of Los Angeles when routing allows
- Negotiate smart contracts with clauses that cap or define surcharge responsibilities
- Work with a reliable freight forwarder for route optimization and freight risk management.
The best freight forwarder you can choose
ASLG stands out by offering more than just shipping services. We provide strategy, clarity, and peace of mind. From minimizing port congestion surcharges to optimizing transit routes and forecasting risk, ASLG gives you control over your logistics. Our team combines global shipping experience with hands-on local support, ensuring your cargo stays on schedule and within budget.
