Original article source supplychain247.com
By Jeff Berman
United Parcel Service, Inc. announced an increase in its Ground, Air, International and Freight average rates, the company has announced these rate hikes a month and a half earlier than last year.
In earlier fashion than usual, UPS yesterday rolled out United States rate changes that will go into effect in the coming weeks and months.
UPS officials said in a statement that the company continues to make investments in the speed, scope and coverage of its transportation network.
“Rate increases will support ongoing expansion and capabilities enhancements, while UPS strives to maintain the high service levels customers expect,” the company said.
The announced rate changes include:
- UPS U.S. Ground service will increase by an average net 4.9 percent, effective December 26, 2016;
- Daily rates for UPS U.S. Air and International services will increase an average net 4.9 percent;
- UPS Air Freight rates within and between the U.S., Canada and Puerto Rico, will increase an average net 4.9 percent, also effective December 26, 2016; and
- UPS Freight announced an average net 4.9 percent general rate increase effective September 19, 2016
In its 2017 “Selected Daily Rates Surcharge Changes,” on the company’s Website, UPS noted that the additional handling surcharge will apply to any package with the longest side exceeding 48 inches, instead of 60 inches for all Air and International packages, with the additional handling charge increasing by $0.35. And it also said that effective January 8, 2017, the additional handling surcharge will also apply to UPS SurePost packages.
UPS and its biggest competitor, FedEx, announced additional handling surcharges last May.
On May 6, UPS said it is changing the measurement that determines whether the UPS Additional Handling charge will be applied to UPS Ground services packages in the U.S. explaining that any package with the longest side exceeding 48 inches, instead of 60 inches, will be assessed the fee and that the additional handling fee of $10.50 remains the same, with the change not impacting UPS Air or International shipments.
“This change is being implemented due to the additional handling required for these types of packages in the UPS network,” UPS said at the time.
An industry stakeholder was blunt in explaining those additional handling pricing hikes by UPS and FedEx, simply saying “they do it because they can.”
Given the ongoing strides e-commerce is making in terms of boosting ground delivery volumes, coupled with the vast UPS-FedEx duopoly continuing to dominate the domestic ground package market, it wouldn’t make sense for them not to raise rates, it seems, he added.