UPS to Raise Ground Rates 3.6% on Average

United Parcel Service on Nov. 2 announced that it will raise its rates for the 15th time in 15 years. Standard ground shipping rates will increase an average of 3.6%, effective Jan. 7, although lighter-weight parcels will go up by 4.0% on average (see chart below). The “residential premium” — the price differential between commercial-based and residential-based shipments — will increase from $1.05 to $1.10 per package. Among other rate changes, the price of overnight and two-day air/express services will jump 4.0%. UPS’s temporary fuel surcharge will remain at 1.25%.

UPS spokesperson Susan Rosenberg says that in addition to covering ongoing increases in expenses, the rate hike will enable UPS to improve technology on many fronts — including its delivery tracking system. She says that the increases are not going toward any operational changes in security in light of the recent anthrax infiltration of the U.S. mail. “Any costs associated with changes in our practices aren’t part of our rate analysis, which was going on well in advance of Sept. 11.”

UPS is responding to customer requests for more warning of its rate increases, Rosenberg says. UPS had typically announced its rate increase in early- to mid-December, but this year the carrier released the news earlier “to give customers a better opportunity to plan against their fiscal calendars, which in many cases are on regular calendar cycles,” Rosenberg says. Then again, past UPS rate hikes typically took effect in February, rather than January.

Sample UPS Ground Rates
Weight/zone Residential/commercial Old rate New rate % change
2 lbs./zone 2 Commercial $3.18 $3.30 3.8%
2 lbs./zone 2 Residential $4.23 $4.40 4.0%
2 lbs./zone 5 Commercial $3.83 $3.98 3.9%
2 lbs./zone 5 Residential $4.88 $5.08 4.1%
2 lbs./zone 8 Commercial $4.48 $4.65 3.8%
2 lbs./zone 8 Residential $5.53 $5.75 4.0%
5 lbs./zone 2 Commercial $3.53 $3.67 3.9%
5 lbs./zone 2 Residential $4.58 $4.77 4.1%
5 lbs./zone 5 Commercial $4.57 $4.74 3.7%
5 lbs./zone 5 Residential $5.62 $5.84 3.9%
5 lbs./zone 8 Commercial $5.60 $5.82 3.9%
5 lbs./zone 8 Residential $6.65 $6.92 4.1%

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