United Parcel Service announced on Nov. 21 that it will raise rates beginning Jan. 5. At first glance, it looks like the Atlanta-based parcel carrier took it easy on mailers. UPS commercial ground rates will increase 1.9%, while UPS air and UPS Worldwide Express delivery will go up an average of 2.9%. Last year, UPS ground delivery fees rose 3.9%, while UPS Air went up 3.4%, and Worldwide Express delivery increased 3.9%.
But delivery to residential addresses is taking more of a hit. The premium for packages and letters going to residences will rise 22%, from $1.15 to $1.40. Last year, the surcharge for residential deliveries increased 4.5%, from $1.10 – $1.15.
According to spokesperson Susan Rosenberg, about 80% of UPS’s business is commercial, so one reason for the hefty surcharge hike is that the carrier is delivering fewer residential packages. Another reason is the greater distances between residential delivery stops, Rosenberg says. (UPS is taking a new tack in courting residential business: Earlier this month, the carrier began testing Basic, a no-frills, low-cost service geared to companies shipping lightweight parcels to residences.)
UPS will also introduce a $1 surcharge to commercial shipments headed to certain zip codes that are less populated or less accessible to the carrier–the same zip codes subject to the UPS residential delivery area surcharge. First applied in 1999, the residential delivery surcharge remains at $1.75.
UPS will discontinue the fuel surcharge on UPS Ground service, but institute new fuel surcharges on UPS Next Day Air, UPS Second Day Air, UPS Three Day Select, and international services to reflect their higher fuel consumption. The surcharges will be based on a new index reflecting the U.S. Energy Department’s Gulf Coast spot price for a gallon of kerosene-type jet fuel. The index wasn’t available at press time, but according to Rosenberg, the carrier will reveal the actual charges in mid-December.
Also in January, UPS will expand its size limits, increasing from 130″ to 165″ in length and girth combined for oversized packages. The UPS maximum weight limits remain the same.