Maersk Peak Season Surcharge (PSS): Impact on Indian Imports and Exports

Maersk, a major shipping player, has implemented Peak Season Surcharges (PSS) for shipments originating from India and the Middle East. While this ensures efficient service during peak demand, it also impacts the import and export industry in India. Let's delve into these effects.

Increased Import Costs:

• Indian importers will face higher landed costs due to the additional $5,000 (US & Canada) and variable surcharges (UAE) per container. This can squeeze profit margins and potentially lead to price hikes for consumers.

Export Challenges:

• Indian exporters face a potential loss of competitiveness. The PSS increases export costs, making Indian goods relatively more expensive in the international market. This might lead to decreased demand from foreign buyers.

Planning and Efficiency:

• The impact can be mitigated through strategic planning. Importers and exporters can: Negotiate longer payment terms with suppliers or customers to manage cash flow. Consolidate shipments to minimize the number of containers incurring the surcharge. Explore alternative shipping lines or routes for potentially lower costs. Adjust inventory levels to account for longer lead times due to potential port congestion during peak seasons.

Paper Industry Example:

• Consider the paper industry. With PSS increasing import costs of raw materials like wood pulp, paper manufacturers might face pressure to raise paper prices. This can have a ripple effect across various sectors that rely on paper products.

Overall, Maersk's PSS presents challenges for Indian importers and exporters. However, by adopting strategic planning and exploring alternatives, businesses can navigate this surcharge and maintain smooth import and export operations.