What is a Peak Season Surcharge?

As a consumer, you have probably incurred a peak season surcharge while not being aware you were being penalized during a “peak season”. You may have even prepared for slower service during the holiday season but have never asked the question “what is a peak season surcharge?”

A Peak Season Surcharge (PSS) is an additional fee that carriers such as freight companies, parcel delivery services, or shipping lines apply during periods of high demand, typically during the busiest shipping seasons. This surcharge helps carriers manage increased costs associated with higher shipping volumes, such as hiring extra staff or securing more equipment. Essentially, it's a temporary increase in shipping rates to offset operational expenses during busy periods.

When do peak season surcharges occur in the tire industry?

Peak seasons that incur surcharges differ slightly according to each industry, for instance, the back-to-school rush when parents are ordering school supplies would happen at the end of summer. While generally speaking the PSS is most commonly applied during the holiday season across all industries, tire prices often surge during winter and summer due to a classic case of supply and demand: more drivers need specific tires at the same time, giving retailers and manufacturers a reason to raise prices.

Following is an overview of common times for PSS: 

  • The holiday season, especially from October to December and before Chinese New Year
  • Spring changeover (March–May) when there is a high demand for all-season or summer tires
  • Supply chain disruptions, including port congestion or fuel price spikes or when there are situations like a natural disaster

How to avoid peak season surcharges

Shippers, importers, and retailers are generally all affected by PSS and see an increase in their freight costs during these periods; sometimes these increases are passed on to consumers. Depending on the climate of where you live or planning to buy tires for, try to strategize and order them ahead of when the surcharges may be applied. I.e. If you're purchasing winter tires for driving during snowy weather, order them during the off-seasons such as summer (June-September) so that you can also avoid the spring change over demand season and vice versa for winter. Another way to mitigate these charges is to order in bulk so that the extra fee is applied to only one package and not several, which would lower the overall price. Picking up in-store is also a good option if the products are from a local store.

Should you budget for peak season surcharges?

While it’s possible to mitigate some of these surcharges, they are increasingly becoming more common. In the past, UPS has applied holiday surcharges ranging from $1.50 to $8.25 per package during peak windows. Carriers such as UPS and FedEx often publish surcharge calendars in advance so you can prepare for it and even avoid it where possible. Surcharges may range from carrier to carrier and some may only apply them to certain packages, so if you have flexibility, do your research on carriers ahead of time. With clever strategizing, you can avoid some of these charges but it may also be worth planning them into your budget ahead of time.

To plan ahead for your next tire change, check out this previous blog article:

How Often Should You Change Tires?

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