UPS Raises Rates, Others May Follow

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Shipping items just got more expensive. UPS on Dec. 31 raised its prices on ground shipments by another 4.9 percent — just a year after enacting an initial 4.9 percent increase. Take note: Rivals FedEx and DHL usually match UPS' increases.

UPS rates for air deliveries in the United States, as well as international shipments originating from the U.S., were going up about 6.9 percent at press time. UPS is taking this action to offset a planned 2 percent drop in a surcharge levied on UPS customers for fuel costs.

Big corporate clients with high shipping volumes usually secure contracts with UPS and the other shipping services to lock in lower prices. One would think that the industry's large distributors would do the same. However, at least one doesn't: Parts Unlimited and Drag Specialties reportedly don't benefit from volume discounting.

"We feel the same hits from UPS as everybody else does," says Greg Blackwell, VP of sales and marketing at LeMans Corp. "We've been absorbing a lot of rate increases from the freight and UPS, because the fuel prices have been going up.

"If we have a policy of free freight to a dealer, then that costs us more money now to service that dealer," adds Blackwell. "So we have to think about ... how we handle those orders."

"We do feel the impact of price increases," says Tucker Rocky's Del Munoz. "We work very hard with UPS and other freight companies to ensure we are getting a very competitive price for our company."

— Arlo Redwine