UPS to cut fuel surcharge by 40%

United Parcel Service,

which is due to raise its rates on Jan. 7, said on Dec. 4 that it plans to shift from its current 1.25% fuel surcharge to an index-based surcharge of 0.75%—a 40% decrease.

The change to index-based surcharges is designed to help the carrier respond to fuel price fluctuations and help shippers realize savings when fuel prices drop. The current fuel surcharge rate was implemented in August 2000. The reduction will remain in place through at least Feb. 3.

After Feb. 3, adjustments will take effect on the first Monday of each month and will be based on the U.S. Energy Department’s On-Highway Diesel Fuel Prices. Changes to the UPS fuel surcharge will reflect prices from two months prior. The surcharge will continue to apply to all small package transportation charges in all regions of the globe served by UPS. Customers will be able to check on fuel index changes and get other information about the fuel surcharge at UPS’s Website (ups.com).

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