ToUnited Parcel Service (
), size does matter. On Tuesday, the world's biggest
package-delivery company announced that it would start
dimensional-weight pricing -- charging based on a package's size
as well as its weight.
The new pricing method, which starts Dec. 29, will apply to
the company's U.S. ground services as well as its standard
service to Canada. UPS already uses this pricing scheme for its
domestic and international air shipments.
The Atlanta, Ga.-based package giant's pricing change comes in
response to online retailers who ship small items in big boxes,
thus wasting precious space in UPS trucks.
"UPS has been researching the potential expansion of
dimensional-weight pricing for a number of years because it
enables us to more appropriately align rates with costs, which
are influenced by both the size and weight of packages," said UPS
Executive Vice President and Chief Commercial Officer Alan
Gershenhorn in a press release.
) announced in May that it would start charging by package size
on Jan. 1, 2015.
UPS has delivered higher earnings each year since the tough
times of 2008 and 2009. Analysts polled by Thomson Reuters see
profit rising 11% this year. Bottom-line growth is expected at
15% in 2015.
The company has a long history of raising its shareholder
dividend. In February, UPS bumped up its quarterly dividend by a
nickel to 67 cents a share. Its dividend has more than tripled
UPS pays $2.68 a share on an annualized basis, which works out
to a yield of about 2.6%. It offers the highest yield among the
three dividend-paying stocks in the Transportation-Air Freight
Shares of UPS are forming a saucer-with-handle pattern with a
104.40 buy point. Historically, the stock tends to make
relatively narrow price swings.