Approaches are provided for a congestion detection algorithm for detection of congestion in outroute port queues (associated with respective satellite downlink beams), of a Layer 2 switch on-board a processing satellite, before the congestion reaches the point of dropping packets. Such approaches employ congestion notification protocols to inform all inroute sources of the congested ports. The on-board Layer 2 switch sends congestion notifications to the on-board system controller. The system controller broadcasts a notification reflecting the report of contested ports/beams to source terminals. The source terminals then segregate bandwidth requests regarding traffic destined for congested beams from traffic destined to all uncongested beams, and categorize such requests based on respective traffic priority levels. The system controller makes bandwidth grants according to congestion (for example allowing only higher priority traffic on congested beams) to alleviate the congestion conditions of the respective ports/beams.