US-based companies hit by the economic slowdown face paying higher prices for express and parceldeliveries next year following announcements of rates hikes by UPS, FedEx and USPS. The latter will
offer new discounts for large volumes to try to win market share following DHL’s pullout.FedEx Ground, the US domestic ground parcel operator, has become the latest major serviceprovider to announce its 2009 rates. It will increase its standard list rates for FedEx Ground andFedEx Home Delivery by an average of 5.9% as of January 5, 2009. Its surcharges will also beadjusted.
As announced in September, FedEx Express rates for US domestic and US export shipments willincrease the same day by 6.9% on average, partially offset by adjusting the fuel price at which thefuel surcharge begins, reducing the fuel surcharge by two percentage points. Currently, FedExExpress has a trigger price of $1.14 per gallon of US Gulf Coast kerosene-type jet fuel. BeginningJan. 5, 2009, the trigger price will be $1.30 per gallon.
UPS said in October that it will increase prices by 5.9% on average for UPS Ground packagesalong with an average net increase of 4.9% on all air express and US origin International shipmentson January 5, 2009. This was based on a 6.9% increase in the base rate, less a 2% reduction in theair and international fuel surcharge index.
The US Postal Service (USPS), seen as the third-largest player in the US market, said it willincrease express and parcel prices by 5% on average with effect from January 18, 2009. ExpressMail, offering guaranteed overnight delivery for documents and packages, will go up 5.7%, PriorityMail, the two-day delivery product, will be 3.9% more expensive, while Parcel Select, thelarge-volume shipping service, will go up 5.9%. International shipping services will increase by8.5%.
USPS will also offer discounted Commercial Plus prices for high-volume Express Mail andPriority Mail users. The new Commercial Plus prices for Express Mail are 14.5% less than retail onaverage, and for Priority Mail 7% less than retail on average.
“The new prices are very competitive within the shipping industry and reinforce the valuePostal Service pricing offers our customers,” said Robert Bernstock, president, Mailing andShipping Services. “As always, the Postal Service does not impose fuel surcharges, hiddensurcharges or surcharges for residential delivery or Saturday delivery.”
