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Piracy Risk Surcharge (PRS) is an additional fee charged by shipping companies to cover the extra risks and security measures involved in transporting goods through piracy-prone areas.
The PRS is levied to help offset the costs of increased security during transit through regions known for piracy. This surcharge is typically applied to shipments passing through high-risk zones such as the Gulf of Aden or the waters off the coast of Somalia. It serves as a financial protection for shipping companies and their clients, covering potential losses or damages related to piracy incidents.
The PRS works by adding an extra fee to shipping costs for goods passing through piracy-prone areas. This protects your business by ensuring the safe delivery of goods, minimizing the risk of loss or damage due to piracy incidents.
It also helps shipping companies manage security costs, ensuring smooth logistics operations. By factoring in the PRS, your business can anticipate and account for any additional expenses when shipping through high-risk zones.
Buske Logistics is a Top 40 3PL with over 35 warehouses across North America, specializing in warehousing, transportation, and value-added services. We provide tailored logistics solutions serving major Fortune 500 companies.
PRS is important because it ensures the safety of goods and personnel when traveling through dangerous waters. By adding this surcharge, shipping companies can afford to implement enhanced security measures like armed escorts or additional surveillance to protect the cargo.
For instance, when a healthcare company shipping goods through areas known for piracy, the PRS helps cover the costs of security forces, which are essential for protecting shipments from hijacking. Without this surcharge, the financial burden of handling piracy incidents would be too great for the shipping company to bear, potentially leading to service disruptions.
