UPS to Raise 2010 Ground Rate by 4.9%, Less Than 2009
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11/20/09(Bloomberg) – United Parcel Service Inc. will increase ground-shipment rates in 2010 by 4.9 percent, less than this year, amid a drop in volumes at the world’s largest package-delivery company.
Average rates for goods sent by air will rise 6.9 percent, with a 2 percentage point cut in the fuel surcharge on those deliveries, the same as this year, Atlanta-based UPS said today. Fuel charges during 2010 also will adjust more slowly to rising fuel prices once the changes take effect on Jan. 4, UPS said.
“This will hopefully even things out for our customers,” said Karen Cole, a spokeswoman. “This is in direct response” to a surcharge for air shipments that reached a record 35 percent last year, she said.
The rate increase for UPS’s ground unit is smaller than 2009’s 5.9 percent boost, which was the most in at least eight years as the company faced higher costs for labor, health care and pensions. UPS’s domestic business has contracted for seven straight quarters as the recession damped demand.
Sales fell 15 percent this year through the third quarter to $32.9 billion, the first decline since the company’s initial public offering in 1999.
FedEx Rates
FedEx Corp. said on Sept. 17 that it will increase rates for its express unit by an average of 5.9 percent, with a 2 percentage point reduction in the fuel surcharge. The company hasn’t yet said how much it will increase rates for ground shipments and SmartPost packages that go through the U.S. Postal Service.
UPS’s new system of surcharges to cover fuel expense will add a fee to customers’ bills once jet fuel reaches $1.46 a gallon, instead of the current $1.30, Cole said.
The surcharge for ground packages will take effect when diesel fuel reaches $1.75 a gallon, instead of the current threshold of $1.50, Cole said.
Jet fuel for immediate delivery in New York Harbor fell 1.7 cents to $1.97 a gallon, while the average retail price of diesel fuel at U.S. pumps was little changed yesterday at $2.82 a gallon. Jet-fuel prices jumped 34 percent in the first seven months of 2008 and reached a record $4.36 a gallon.
