On Friday, UPS announced their 2009 rate changes, which will be effective Monday, January 5. UPS announced that domestic Ground rates will increase an average of 5.9%.

Doug Caldwell, EVP of ParcelPool.com, a parcel services provider and consultancy, put together the following analysis on the new rates:

Even though the average increase is 5.9%, the all-important zone 2 one-pound minimum charge is up 37 cents to $4.57, an 8.8% increase. Overall, the 1-5 lb. Ground rates are up 7.7%.

UPS also announced that domestic and international air shipments will increase by an average of 6.9%. However, as they have done in the past three years, UPS will lower the fuel surcharge index by 2%, for a net increase on air and international shipments of 4.9%. For domestic air shipments, actual rate increases range from 2% to 13.2%, depending on service, weight and zone. Here are the average increases for domestic air shipments, by service level:

• Next Day Air up an average of 8%
• Next Day Air Saver up an average of 8.4%
• 2nd Day Air up an average of 8%
• 3 Day Select up an average of just 3.8%

UPS also announced a number of changes to their accessorial rates - here are the highlights:

• Residential Surcharge, up $0.10 to $2.40, a 4.3% increase
• Declared Value will increase $0.05 per $100 to $0.65, an 8.3% increase. The minimum charge for Declared Value will increase $0.15 to $1.95.
• Additional Handling will increase $1.00, to $7.50, a 15.4% increase.
• The charges for Signature Required will increase by $0.25. Adult Signature Required will be $3.75 in 2009.
• The charge for both Saturday Pickup and Saturday Delivery will increase by $2.50 to $15, an increase of 20%.
• The Address Correction charge for UPS Ground packages will increase $2, to $6, a substantial 33% increase. Make sure to use CASS on those addresses, before you ship!
• The Daily Pickup charge will increase $1 per week. Remember, this is for each account number.

New Rural Charges
One of the most surprising changes-UPS will now have two rural Delivery Area Surcharge lists-a "regular" DAS list, up 10 cents to $1.60 for commercial addresses and $2.40 for residential addresses, and a brand new "Extended DAS" list, which is an additional $0.25 surcharge on top of the regular DAS surcharge. The new "Extended" DAS applies only to Residential shipments, at least for 2009 (it's listed as a "no charge" item for commercial addresses). More than 75 million people now live in a ZIP Code subject to at least one of these "rural" area charges-over 25% of the US population. And nearly 50 million of those people are now subject to the new, 25-cent Extended charge.

Residential shipments addressed to these new Extended areas will now pay a total of $2.65 for the rural component. Keep in mind that rural charges are also subject to fuel surcharges, so this new Extended Surcharge could easily top $3. While most of these ZIP Codes are in truly rural areas, others are decidedly not. (Take ultra-chic Malibu California 90265, home to Tom Hanks, Barbara Streisand, Dustin Hoffman and scores of other stars-yes, it's now on the "rural" list.!)

For more information on UPS' rates, please visit www.PARCELindustry.com.

Doug can be reached at doug.caldwell@parcelpool.com or at 503-784-2421.