William B. Cassidy | Nov 01, 2010 5:47PM EDT
UPS announced a 4.9 percent rate hike in January for domestic ground packages and air express shipments in the U.S., the company said Monday.
The rate hike matches a 2011 price increase FedEx Express announced for its air shipments and is virtually the same as the rate increases UPS has announced in each of the last four years.
Those increases have not held up quite as well as the carrier had hoped, but pricing has grown stronger this year as demand has recovered and UPS has pulled back capacity in its networks. Overall domestic package yield grew 4 percent in the first nine months of 2010, and overnight air yield jumped 7.3 percent, the carrier said in its latest earnings report.
Stronger global demand and daily shipping volume helped UPS boost its profit margin to 8.1 percent in the third quarter, compared with 4.9 percent in the third quarter a year ago.
The rate hikes indicate confidence in continuing demand.
The new rates take effect Jan. 3. The 4.9 percent increase in ground rates is based on a 5.9 percent increase in the base rate, less a 1 percent fuel surcharge reduction.
Similarly, UPS air express and outbound international shipment rates will rise 6.9 percent, but the fuel surcharge will be cut 2 percent, the company said.
UPS announced a 5.9 percent general rate hike at its trucking unit, UPS Freight, in September.
-- Contact William B. Cassidy at wcassidy@joc.com.
