PSS and CIC — Ocean Freight Surcharges and Quotation Verification
Interlink編集部What are PSS and CIC?
PSS and CIC are typical surcharges added on top of ocean freight rates. PSS stands for Peak Season Surcharge and is charged when transport demand concentrates during busy seasons. CIC stands for Container Imbalance Charge, which is applied due to container supply-demand imbalances and regional disparities.
In ocean transport, besides the core Ocean Freight itself, various surcharges may arise from factors such as fuel costs, exchange rates, peak seasons, container shortages, port congestion, and route conditions. Among these, PSS and CIC are particularly influenced by market conditions and container supply-demand factors.
When reviewing PSS and CIC, it is important not just to know the surcharge name. In actual logistics practice, you need to confirm whether these are included in the Ocean Freight or separately levied, whether for FCL they apply per container or for LCL per RT, the application period, and whether fees may change even within the quotation validity period.
Scope Covered in This Article
This article organizes PSS and CIC as surcharges related to ocean freight and explains practical differences from Ocean Freight, BAF, CAF, FCL rates, and LCL rates from the perspective of quotation verification in logistics practice.
| Item | Contents Covered in This Article | Contents Addressed in Separate Articles or by Separate Confirmation |
|---|---|---|
| PSS | The meaning of PSS as a surcharge for busy seasons, typical timing of occurrence, and verification points in quotations are explained. | The actual application rates per specific trade lane and the latest carrier tariffs require individual confirmation. |
| CIC | Explains CIC as a surcharge related to container shortages, imbalances, and empty container repositioning. | Market analysis of container supply-demand and internal cost structures of carriers are not covered. |
| Ocean Freight | Explains basic ocean transport freight and that PSS and CIC are additional adjustment fees separate from the base freight. | Details on how Ocean Freight rates are determined or long-term contract rates require separate confirmation. |
| BAF・CAF | Compares the surcharges to PSS and CIC, showing that the reasons for their occurrence differ. | Details on fuel cost or exchange rate calculation formulas, or index-linked mechanisms are not covered. |
| FCL・LCL | Explains that for FCL it appears as a per container unit charge, while for LCL it may appear as an RT unit or as a surcharge on consolidated tariffs. | The overall structure of FCL/LCL rates and local charges require separate arrangement. |
| Freight Forwarder Practice | Discusses what should be checked and how to caution shippers when explaining quotations. | The final cost responsibility depends on sales contracts, Incoterms, quotation terms, and individual agreements. |
What is PSS?
PSS, or Peak Season Surcharge, is a surcharge applied during peak seasons in ocean transport. When cargo volumes concentrate, vessel space becomes scarce and bookings can become difficult. In such periods, carriers or NVOCCs may set a PSS.
Periods when PSS is likely to occur include the year-end sales season, before Lunar New Year, before long public holidays, shipping periods for seasonal products, before and after factory holidays, times of port congestion, and times of vessel space scarcity. It is important in practice that PSS impacts not only cost but also space securing, container arrangement, CFS delivery, and schedule adjustments rather than merely reflecting "busy periods with higher costs."
Even if PSS is not applied at the time of obtaining a quotation, it may apply at the actual shipment time. Therefore, in the quotation, it is necessary to confirm whether PSS is included or added separately, the start and end dates of application, quotation validity, and whether the basis is booking date or shipment date.
What is CIC?
CIC, or Container Imbalance Charge, is a surcharge related to container supply-demand balance and regional disparities. In some areas, export cargo dominates and empty containers become scarce, while in other regions empty containers remain idle after import. Such regional disparity incurs costs for repositioning empty containers and balancing supply and demand.
CIC is not simply a charge arising from large cargo volumes. The main issues are that containers needed at a location are not available, or empty containers must be moved to another region. Port congestion, inland transport delays, export-import balance disparities, and container shortages on specific trade lanes also affect CIC.
CIC is often shown per container unit for FCL and as an RT unit or as an additional item on consolidated tariffs for LCL. Even for small volume LCL cargo, minimum charges or consolidated tariff settings may make CIC appear relatively expensive than expected.
Difference from Ocean Freight
Ocean Freight is the basic freight for transporting cargo from the loading port to the destination port. In contrast, PSS and CIC are adjustment fees added on top of Ocean Freight according to market conditions, busy seasons, container supply-demand, and route circumstances.
In practice, PSS and CIC may be included within an Ocean Freight line item or displayed separately as PSS, CIC, Peak Season Surcharge, or Container Imbalance Charge. Therefore, comparing only the Ocean Freight amount on the surface in quotations can cause misunderstandings.
For example, a quotation from Company A may include PSS in the Ocean Freight, while Company B may show a low Ocean Freight but separate PSS and CIC charges. In this case, although Company B’s Ocean Freight looks cheaper, the total cost may be higher.
Comparison of PSS, CIC, BAF, and CAF
PSS, CIC, BAF, and CAF are all surcharges related to ocean freight, but their reasons for occurrence differ. Even if their names look similar, it is necessary to distinguish precisely what costs each adjusts.
| Item | Reason for Occurrence | Main Calculation Unit | Appearance in FCL and LCL | Points Prone to Fluctuate |
|---|---|---|---|---|
| PSS | Due to concentrated transportation demand during peak seasons, resulting in tight vessel space and container capacity. | Often container unit for FCL, and RT unit for LCL. | In FCL, set by container size such as 20FT, 40FT, 40HQ; in LCL, may appear as an additional item on the consolidated tariff. | Subject to change during busy seasons, before Lunar New Year, year-end shopping season, and port congestion. |
| CIC | To address container shortages, empty container imbalance, repositioning costs, and inter-regional supply-demand adjustments. | Typically container unit in FCL; in LCL, may be RT unit or displayed with a minimum charge. | Total amount varies by number and size for FCL; in LCL, minimum charges may impact even small shipments. | Affected by container shortages, port congestion, import-export balance disparities, and specific route supply-demand changes. |
| BAF | To adjust for fluctuations in fuel costs. | May be container unit, RT unit, or included within the freight rate. | Sometimes included in Ocean Freight, other times displayed as a separate line item. | Varies with fuel prices and tariff revisions by shipping companies or NVOCCs. |
| CAF | To adjust for exchange rate fluctuations. | Set as a percentage of freight or as a separate charge. | May not be explicitly shown on quotes and could be included in the freight charge. | Fluctuates depending on exchange rates and tariff conditions. |
PSS and CIC in FCL
In FCL, PSS and CIC are often shown on a per-container basis. Charges may be set according to container sizes such as 20FT, 40FT, and 40HQ, with conditions sometimes varying for special containers or particular routes.
FCL rates are based on shipping company or NVOCC container freight charges. Therefore, supply-demand of vessel space, container shortages, route congestion, and concentrated transportation demand can be reflected as PSS or CIC.
One important point in FCL is that the total amount can vary significantly depending on container size and quantity. For example, the impact on total cost differs between one 20FT container and three 40HQ containers, even if the unit PSS or CIC is the same. Additionally, a comprehensive review including PSS, CIC, THC, BAF, CAF, drayage, Demurrage, Detention, and Storage is necessary.
PSS and CIC in LCL
In LCL, PSS and CIC may be added per RT unit. LCL cargo involves NVOCCs or freight forwarders consolidating shipments from multiple shippers into one container. As a result, container unit surcharges applied in FCL may be apportioned to shippers on an RT basis or reflected as an additional item within consolidated tariffs in LCL.
LCL sometimes sets minimum charges even for small cargo volumes. Therefore, fixed costs or minimum charges such as CFS Charge, D/O Fee, Document Fee, PSS, CIC, BAF, and CAF can have a significant impact on total charges, sometimes exceeding the Ocean Freight itself for small shipments.
In LCL quotes, PSS and CIC may be included in the Ocean Freight or shown separately. When displayed as PSS per RT or CIC per RT, it is necessary to verify the RT definition, minimum charges, and whether charges are based on chargeable weight or volume.
Differences in Appearance Between FCL and LCL
| Check Item | Appearance in FCL | Appearance in LCL | Practical Notes |
|---|---|---|---|
| Calculation Unit | Usually shown by container units such as 20FT, 40FT, 40HQ. | May be shown by RT, CBM, weight units, or with minimum charges. | Comparing FCL and LCL as the same concept can cause errors in total cost evaluation. |
| Presentation on Quotes | Displayed as PSS per container or CIC per container at times. | Displayed as PSS per RT, CIC per RT, or included in Ocean Freight. | Must confirm whether included or separately stated to compare quotes correctly. |
| Minimum Charges | Usually not visible as minimum charges since it's container-based. | Minimum charges can significantly influence the total cost for small shipments. | Confirm minimum charges especially when cargo volume is small. |
| Market Condition Impact | Directly affected by vessel space shortages, container shortages, and route congestion. | Reflected in NVOCC or consolidators' LCL tariffs. | For LCL, check not only shipping company tariffs but also the consolidators' rate structures. |
| Impact on Total Cost | The greater the number of containers, the more significant the effect of PSS and CIC. | Fixed costs and minimum charges may make small shipments feel disproportionately expensive. | Compare total costs, not just Ocean Freight unit rates. |
Application Timing and Quote Validity
PSS and CIC charges may change depending on the application timing. Even if a quote does not include PSS at the time of issuance, PSS may be applied at the actual shipment time. Similarly, CIC may be altered mid-way due to container supply or route conditions.
Particular attention should be paid to quote validity and the applicable reference date. Although a quote may specify its validity period, surcharges may be subject to "shipping company or NVOCC application conditions." In such cases, the reference is not the quote date but may be the Booking date, gate-in date, shipment date, or B/L date.
When presenting quotes to shippers, it is important to confirm surcharge applicability timing, potential changes, validity periods, and whether the basis is shipment date or Booking date before stating "this amount is final."
When Included in the Quote
When PSS and CIC are included in the Ocean Freight, the surcharge may not be immediately apparent on the quotation. In such cases, there is a possibility that adjustment fees related to busy seasons or container supply and demand are included within the Ocean Freight item.
The advantage of quoting these charges as included is that it is easier to explain the total amount to the shipper. On the other hand, it can become unclear which surcharges are included when comparing with other company quotations.
When comparing quotes, always confirm whether the amount is inclusive of PSS and CIC or if they are added separately. Even if the Ocean Freight looks higher, if surcharges are included, the total amount could be cheaper than a separately stated quote.
When Displayed Separately
If PSS and CIC are displayed separately, they are added on top of the Ocean Freight. For FCL, they may be shown as PSS per container or CIC per container. For LCL, they might be shown as PSS per RT or CIC per RT.
With separate display, it is necessary to confirm the unit price, applicable unit, minimum charge, start and end dates of application, and the validity period of the quotation. Especially for LCL, the presence of a minimum charge, as well as the unit price, can significantly affect the total amount.
Also, for quotes displayed separately, it is important to clearly explain to the shipper that these are “charges added separately from Ocean Freight.” Insufficient explanation may lead to the charge being perceived as “higher than the quote” at billing.
Relationship with RT
For LCL cargo, PSS and CIC may be calculated per RT unit. RT (Revenue Ton) is a billing unit based on whichever is greater between weight or volume. In LCL, charges such as Ocean Freight, CFS Charge, BAF, CAF, PSS, and CIC can be presented on an RT basis.
For example, if the actual weight of the cargo is light but the volume is large, RT may be calculated based on volume. Conversely, if the volume is small but the weight is heavy, charging may be based on weight. Therefore, looking at PSS and CIC unit prices alone does not determine the final amount.
In LCL quotations, alongside the unit prices of PSS and CIC, it is necessary to confirm the definition of RT, minimum charges, whether the charge is weight-based or volume-based, and the relationship with other RT-based charges.
Precautions for Prepaid and Collect
PSS and CIC may be treated as either prepaid or collect. Even if Ocean Freight is prepaid, other local charges or surcharges may occur at the destination side. Under collect terms, PSS, CIC, and other freight or adjustment fees may be billed at the destination.
In actual logistics practice, it is necessary to separately confirm “who pays the charges” and “where the charges are billed.” Generally, prepaid charges are paid at the origin, but not all costs necessarily conclude at the origin side. Under collect, charges are billed at the destination side, which can cause issues as importers or consignees may not anticipate these costs.
The party responsible for the charges should be confirmed according to Incoterms, sales contracts, B/L terms, and the freight forwarder’s quotation conditions. Proceeding without clarifying whether PSS and CIC are prepaid or collect and who ultimately bears the cost may result in disputes at the billing stage.
Scope of Forwarder Involvement
PSS and CIC are often set based on shipping lines’ or NVOCCs’ tariffs, market conditions, and route circumstances, and are not fees that the freight forwarder can arbitrarily determine. However, forwarders have a role in clearly explaining the quotation conditions to the shipper and informing them beforehand about possible changes and applicable conditions.
| Situation | What the Forwarder Can Explain | Party to Confirm With | Precautions |
|---|---|---|---|
| Explanation of PSS and CIC | Can explain that these are surcharges related to busy seasons and container supply and demand. | Shipping Lines, NVOCCs, Consolidators | While they can explain the reasons for the charges, forwarders may not have the authority to determine individual rates. |
| Quotation Presentation | Can clarify whether PSS and CIC are included in Ocean Freight or billed separately, and what the calculation units are. | Quotation providers, Sales representatives, Operations staff | If the difference between “included” and “separately stated” is not clearly explained, misunderstandings may arise at billing. |
| Information about Application Period | Can provide the start date of application, quotation validity period, and whether the basis is shipment date or booking date. | Shipping Lines, NVOCCs, Consolidators | It is necessary to inform in advance that surcharge rates may change after obtaining the quotation. |
| Consultation on Cost Responsibility | Can confirm whether charges are prepaid or collect and who will be billed. | Shippers, Importers, Overseas agents, Destination agents | The final party responsible is determined by sales contracts and Incoterms, so forwarders should be careful not to unilaterally decide. |
| Quotation Comparison | Can organize multiple quotations for total cost comparison. | Shippers, Quote submitters, Internal sales representatives | Do not compare only Ocean Freight; confirm inclusions of PSS, CIC, BAF, CAF, THC, CFS, D/O fees, etc. |
| Explanation of Additional Charges Afterward | Can explain reasons for changes in surcharge conditions between quotation and shipment. | Shipping Lines, NVOCCs, Consolidators, Shippers | If changes are not noted at the time of quotation, negotiations with shippers can become difficult. |
Common Misunderstandings
| Common Misunderstandings | Actual Viewpoint | Practical Notes |
|---|---|---|
| Confirming Ocean Freight finalizes the sea transportation cost. | Charges such as PSS, CIC, BAF, CAF, THC, CFS Charge, etc. may apply separately from Ocean Freight. | Check the total amount including both Ocean Freight and surcharges/local charges. |
| PSS and CIC are always shown as separate items. | Some quotations may include them within the Ocean Freight. | If you don’t check whether they are included or separate, you may miscompare quotes from different providers. |
| If no PSS is shown when obtaining a quote, it will not be applied later. | During peak seasons or depending on the shipment timing, PSS may be applied after the quotation. | Check the quotation validity period, start date of charge application, and whether this is based on shipment date or booking date. |
| CIC only applies when cargo volume is high. | CIC relates not only to cargo volume but also to empty container shortages and regional imbalances. | Consider export/import balance, container repositioning, port congestion, and other impacts. |
| PSS and CIC have little effect on LCL shipments. | For LCL, due to RT units or minimum charges, even small shipments could be significantly affected. | Confirm RT calculations, minimum charges, and whether charges are included or shown separately. |
| Prepaid means no surcharges apply on the destination side. | Even if Ocean Freight is prepaid, other local charges or adjustment fees may occur on the destination side. | Confirm the scope of prepaid vs collect, destination-side charges, and B/L terms. |
| PSS and CIC are expenses that freight forwarders can adjust freely. | In most cases, these charges are based on tariffs or market conditions set by shipping lines, NVOCCs, or consolidators. | Forwarders should explain the reasons and conditions for these charges and, if necessary, verify with the original quotation source. |
Common Problematic Cases in Practice
| Case | Points Where Problems Often Arise | Documents to Check | Practical Notes |
|---|---|---|---|
| PSS was applied after obtaining the quotation | If the shipper thinks the quotation price is fixed cost, they may resist additional charges. | Quotation, validity period, charge start date, scheduled shipment date, shipping line or NVOCC notifications | Make sure to note in the quotation that "Surcharges will be applied according to conditions effective at shipment." |
| Compared quotes with PSS included vs separate | Comparing only the Ocean Freight fields may lead to errors in judging the total cost. | Quotation details, surcharge items, total amounts, remarks | Align all quotes to the same conditions before comparison. |
| Overlooked minimum charges for LCL shipments | Even with small cargo volume, minimum charges may make the cost higher than expected. | LCL tariff, RT calculations, minimum charges, cargo details | Check not only the unit rates but also minimum charges and RT calculation methods. |
| CIC was invoiced separately later | If the shipper misunderstands CIC as included in Ocean Freight, it causes billing disputes. | Quotation, invoice, CIC application notice, shipping line or NVOCC tariff | Confirm at the quoting stage whether CIC is included or invoiced separately. |
| Destination-side PSS/CIC invoiced under Collect terms | Can cause issues when importers or consignees are unprepared for these costs. | B/L, quotation terms, Arrival Notice, destination-side billing details | Clarify prepaid vs collect scope in advance and confirm which party is responsible for charges. |
| Missed differences in amounts by container size for FCL | PSS and CIC costs may vary between 20FT, 40FT, and 40HQ containers. | FCL quotations, container sizes, number of containers, shipping line tariffs | Calculate total cost by size and unit accordingly. |
| Surcharges changed within quotation validity period | Shippers may think all costs are fixed within the validity period. | Quotation conditions, remarks, surcharge application terms, scheduled shipment date | Check if validity applies only to Ocean Freight itself or also to surcharges. |
Decision Checklist
| Check Point | Who to Check With | Points to Confirm | Actions if Problems Arise |
|---|---|---|---|
| When Obtaining a Quotation | Shipping line, NVOCC, Consolidator, Internal Quotation Staff | Whether PSS・CIC is included or separate, unit price, applicable unit, minimum charge | Clearly state conditions in the quotation remarks and reconfirm any unclear points. |
| When Presenting Quotation to Shipper | Shipper, Sales Staff | Total amount including surcharges, not just Ocean Freight | Explain that “the amount may fluctuate depending on surcharge application conditions at the shipment date.” |
| At Booking | Shipping line, NVOCC, Overseas Agent | Whether based on booking date or shipment date, PSS・CIC applicable or not | If conditions differ from the quotation stage, inform the shipper in advance. |
| When Arranging FCL | Shipping line, NVOCC, Drayage Staff | PSS・CIC by container size and number of containers | Recalculate total amount separately for each 20FT, 40FT, and 40HQ container. |
| When Arranging LCL | Consolidator, NVOCC, CFS Staff | RT calculation, minimum charge, whether PSS・CIC is included or separate | Confirm if minimum charges apply even for small volume cargo. |
| When Checking Invoice | Accounting, Sales, Operations Staff, Invoice Issuer | Discrepancies between the quotation and invoice, basis for added PSS・CIC | Cross-check shipment date, applicable period, and quotation conditions; organize explanation documents for the shipper. |
| When Confirming Prepaid or Collect | Shipper, Importer, Overseas Agent, Destination Agent | Which charges are prepaid at origin and which are payable at destination | Confirm separately who bears the cost and where the billing is issued. |
Example 1: PSS Applied After Obtaining Quotation
At the time the shipper obtained a quotation for ocean freight on planned export cargo, PSS was not applied. However, as the actual shipment date approached the busy season before Lunar New Year, the shipping line introduced a new PSS. As a result, the ocean transportation cost became higher than the quotation amount.
In this case, the issue is less about the PSS itself and more about whether it was explained at the time of the quotation that “the surcharge might change depending on application conditions at shipment.” If the shipper interprets the quotation amount as final cost, disputes may arise upon additional billing.
Freight forwarders should not only specify the validity period on the quotation but also clearly state that market-driven surcharges such as PSS and CIC may be subject to change according to the shipping line's or NVOCC’s application conditions.
Example 2: Failure to Confirm Inclusion/Separation of PSS for LCL
In comparing LCL quotations, Company A included PSS and CIC in Ocean Freight, while Company B showed a lower Ocean Freight by separating PSS and CIC. The shipper judged Company B to be cheaper based on just the Ocean Freight column, but at billing, additional charges like PSS, CIC, CFS Charge, and D/O Fee were added, making the total higher than Company A’s.
For LCL shipments, surcharges calculated per RT and minimum charges can significantly influence the total cost. Particularly for small shipments, fixed local charges and surcharges may appear larger than the base Ocean Freight.
To avoid such misunderstandings, it is necessary to compare quotations not only by Ocean Freight but also by confirming whether PSS and CIC are included or separate, RT calculations, minimum charges, and the total cost including destination charges.
Example 3: High Costs Due to CIC Despite Small Cargo Volume
Because the cargo volume was small LCL, the shipper expected relatively low ocean freight costs. However, due to container shortages at the origin side, CIC was charged per RT. Furthermore, the minimum charge was applied, making the surcharge burden relatively large compared to the cargo volume.
CIC is not solely based on cargo volume. It arises due to container supply-demand balance, imbalances in empty container availability, port congestion, or specific route circumstances. Even small shipments can incur higher-than-expected total costs due to minimum tariffs or RT-based calculations.
In such cases, the freight forwarder should explain that CIC arises not because “cargo volume is high,” but as an adjustment cost related to container supply-demand or imbalances. Also, confirming the presence or absence of minimum charges for LCL in advance is important.
Practical Points to Note
PSS and CIC are typical surcharges added on top of ocean freight but differ in nature from the base Ocean Freight. PSS relates to peak seasons, while CIC is an adjustment cost related to container supply-demand and imbalances.
For FCL, these may appear as charges by container unit; for LCL, as additions per RT or on consolidator tariffs. Sometimes they are included in Ocean Freight; other times, billed separately.
When comparing ocean freight, it is essential to confirm not only the base freight but also whether PSS and CIC are included or separate, their applicable periods, calculation units, minimum charges, quotation validity, prepaid or collect status, and the total cost including other surcharges and local charges.
Summary
PSS and CIC are surcharges related to ocean freight that are highly influenced by market conditions and container supply-demand. PSS relates to concentrated demand during busy seasons, while CIC relates to container shortages and regional imbalances.
In actual logistics practice, understanding the names PSS and CIC alone is insufficient. It is necessary to verify whether they are included in Ocean Freight or added separately, whether they apply per container for FCL or per RT for LCL, whether minimum charges apply, and the timing of application.
When comparing quotations, it is important not to look only at the surface Ocean Freight but to consider the total amount including PSS, CIC, BAF, CAF, THC, CFS Charge, D/O Fee, etc. Since PSS and CIC may fluctuate depending on market conditions, freight forwarders need to clearly explain the application conditions and the possibility of changes at the quotation stage.
