A Closer Look at the 2009 UPS Rates

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.