A network device includes a Network Interface Device (NID) and multiple servers. Each server is coupled to the NID via a corresponding PCIe bus. The NID has a network port through which it receives packets. The packets are destined for one of the servers. The NID detects a PCIe congestion condition regarding the PCIe bus to the server. Rather than transferring the packet across the bus, the NID buffers the packet and places a pointer to the packet in an overflow queue. If the level of bus congestion is high, the NID sets the packet's ECN-CE bit. When PCIe bus congestion subsides, the packet passes to the server. The server responds by returning an ACK whose ECE bit is set. The originating TCP endpoint in turn reduces the rate at which it sends data to the destination server, thereby reducing congestion at the PCIe bus interface within the network device.