Parcel - February 2008 - (Page 20) Next Day Air Hundredweight % Increase 2nd Day Air A.M. Hundredweight % Increase Tier 1 2 3 4 5 6 7 100 Pounds or More 7.0 7.0 6.9 7.0 7.0 5.5 7.2 Tier 1 2 3 4 5 6 7 100 Pounds or More 5.7 5.8 5.9 5.9 5.9 5.9 5.8 Next Day Air rate. UPS is clearly discouraging the use of Next Day Air Saver through its pricing strategy. Table 3 summarizes the impact of the increase. Next Day Air Saver Hundredweight rates increased in all Tiers from 5.3–6.4%. There is a significant difference in the percentage increase among zones within each Tier. For example, in Tier 1, zone 2 increased 0.9% while zone 5 rose a staggering 9.7%. 2nd Day Air: A second business day delivery of both letters and packages. Letters increased between $0.40- $1.15 (4.4 – 9.9%) depending on the zone. Rates increased an average of 7.1% for 1 – 70 pound packages; but, like last year, there is a large disparity among the various weights and zones. Rates increased at a lesser percentage (4.3%) in zones 202 - 204 where use of 2nd Day Air is unlikely and pricing becomes a non-factor. Whereas, there were substantial increases in zones 205 – 208 (8.2%), which represent the vast majority of volume. (SmartTran’s analysis shows that you can expect an 8.0% increase in 2nd Day Air charges.) By reducing rates in low-utilized zones and substantially increasing rates in high volume zones, UPS touts an average increase which is clearly understated. The rates for this service average 42.5% off of the Next Day Air rate. Table 4 summarizes the impact of the increase. Next Day Air Saver Hundredweight % Increase 3 Day Select Hundredweight % Increase Tier 1 2 3 4 5 6 7 100 Pounds or More 5.9 5.8 5.8 6.4 5.8 5.3 5.8 Tier 1 2 3 4 5 6 7 200 – 499 lbs. 6.1 6.1 6.1 6.1 6.1 6.1 6.0 500 – 999 lbs. 6.2 6.1 6.2 6.2 6.1 6.1 6.1 2nd Day Air Hundredweight % Increase Ground Commercial Hundredweight % Increase Tier 1 2 3 4 5 6 7 100 Pounds or More 5.8 5.8 6.0 6.0 6.1 6.0 5.9 Tier 1 2 3 4 5 6 7 200 – 499 lbs. 5.2 5.2 5.3 5.3 5.3 5.2 4.2 500 – 999 lbs. 5.3 5.3 5.3 5.4 5.4 5.3 4.2 20 February 2008 www.PARCELindustry.com http://www.PARCELindustry.com
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