February 9, 2010
UPS announced an effective 4.9 percent rate increase for all parcel and express services for 2010 on Friday, exceeding the price increases set earlier by rival FedEx.
The average increase effective Jan. 4, 2010 will include a 6.9 percent hike in the average base price along with a cut in the fuel surcharge index of two percentage points.
The increase comes two months after FedEx Express announced an effective 3.9 percent increase for 2010, based on a 5.9 percent boost in average express pricing for U.S. domestic and U.S. export shipments and a similar cut in the fuel surcharge.
UPS said it will release on Dec. 18 its detailed guide to rates and services, giving greater information on rates based on weight and distance that may vary sharply from the announced average rate increase.
The increase is in line with some of the parcel carrier’s most aggressive annual rate increases in recent years. But it follows a year in which earnings at UPS and other operators have tumbled and pricing has fallen amid declining demand despite the withdrawal of DHL from domestic U.S. service.
UPS said in its report on the third quarter ending Sept. 30 that average revenue per package -- a rough estimate of pricing -- fell 9.1 percent from the same period a year ago, including a 4.3 percent drop in yield for ground shipments and a 23.6 percent decline in overnight express shipments.
FedEx said its revenue per package for domestic express shipments fell 23 percent in the quarter ending Aug. 31.
The U.S. Postal Service announced it will raise its average prices for Priority Mail, which competes most directly with the private express carriers, 3.3 percent on Jan. 4. But the USPS also included stable or lower rates for some variations of the Priority Mail service.
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