UPS To Raise Rates An Average Of 4.9% In 2010
DOW JONES NEWSWIRES
United Parcel Service Inc. (UPS) plans to raise shipping rates an average of
4.9% for packages shipping by ground and air and packages sent to other
countries from the U.S.
The world's largest package shipper said the increase for air express and
international shipments is based on a 6.9% rise in the base rate and a 2%
reduction in the air and international fuel surcharge.
The new rates take effect Jan. 4, when fuel surcharge tables for air express
and ground services also will be adjusted. The changes will more closely align
air and ground fuel surcharges and substantially reduce the volatility of air
surcharges when fuel prices fluctuate.
Last month, UPS posted a 43% drop in third-quarter profit on a deeper-than-
expected slump in daily U.S. volume as the freight sector overall continued to
report mixed signs of economic recovery.
UPS's shares slid 0.5% to $57.23 in after-hours trading. The stock has gained
17% in the past year.
-By Kathy Shwiff, Dow Jones Newswires; 212-416-2357; Kathy.Shwiff@dowjones.com
(Updates throughout with additional background, including material on FedEx in
last paragraph.)
By Bob Sechler
Of DOW JONES NEWSWIRES
United Parcel Service Inc.'s (UPS) main ground and air shipping rates are set
to rise an average 4.9% early next year.
The planned increase in the package-delivery giant's base ground rate is
slightly less than a 5.9% hike that it put in place to start 2009.
The increase in air rates is the same as in 2009. UPS said the base rate for
its air express and U.S. origin international shipments will climb an average
6.9%, offset by a 2% reduction in fuel surcharge.
The new rates take effect Jan. 4, when fuel surcharge tables for air express
and ground services also will be adjusted. UPS said the changes will more
closely align air and ground fuel surcharges, reducing volatility of air
surcharges when fuel prices fluctuate.
Last month, UPS posted a 43% drop in third-quarter profit on a deeper-than-
expected slump in daily U.S. volume as the freight sector overall continued to
report mixed signs of economic recovery.
UPS's shares slid 0.5% to $57.23 in after-hours trading. The stock has gained
17% in the past year.
In September, rival FedEx Corp. (FDX) announced plans for an average 5.9% rate
increase for its Express unit early next year, slightly less than the 6.9%
increase it put in place to start 2009. In both cases, FedEx noted that lower
fuel surcharges likely would offset about 2% of the rate increases.
- By Bob Sechler, Dow Jones Newswires; 512-394-0285; bob.sechler@dowjones.com
(Kathy Shwiff contributed to this report)
(END) Dow Jones Newswires
11-20-091633ET
Copyright (c) 2009 Dow Jones & Company, Inc.
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