UPS announces rate hikes

For the most part, United Parcel Service is taking it easy on catalogers and other shippers in its annual rate increase, which takes effect Feb. 8. Ground delivery rates for packages shipped to residences will rise only 2.4% on average, while deliveries to commercial addresses will increase just 2.5%-both lower than last year’s average rate hikes of 6.9% to residences and 3.6% to business addresses. All residential rates will remain $1 more than corresponding commercial rates.

But UPS has a little something else up its sleeve. Also on Feb. 8, the carrier will add a $1 surcharge on residential deliveries to certain zip codes that are less populated or less accessible to the carrier. Although UPS wouldn’t release the zip codes at press time, spokesman Robert Godlewski said the surcharge would affect only 2.5% of UPS’s residential ground deliveries.

Among other UPS services, rates for Next Day Air, Next Day Air Saver, 2nd Day Air, and Commercial 3 Day Select will increase 2.5% on average.

In a statement, UPS corporate accounts manager Wallace Partee Jr. pointed out that cost-control measures “employed throughout our operations during the past year” enabled the carrier to implement the smallest overall rate increase in more than a decade.

Then why the need for any rate hike? “There’s no single factor,” Godlewski says. “It’s everything cost-related, from the rail services to increased costs in labor to aircraft utility increases. And although we’ve enjoyed very good fuel prices recently, nobody knows where they’re going in 1999.”