Parcel - January/February 2009 - (Page 22)

money on Next Day Air service. Table 2 summarizes the impact of the increase. TABLE 2 – NEXT DAY AIR (percent increase) lbs/zone 1–15 16–70 71–150 TOTAL 102 103 104 105 106 107 108 Total 6.1 7.6 8.0 8.0 8.0 8.5 8.5 8.0 6.4 8.0 8.0 8.0 8.0 8.5 8.4 8.0 5.8 7.7 7.9 8.0 7.9 8.4 8.3 7.9 ––––––––––––––––––––––––––––––––––––––––––––– 6.0 7.8 7.9 7.9 7.9 8.4 8.4 7.9 Next Day Air Saver Hundredweight rates increased an average of 9.3% for all tiers. There is a signiﬁcant difference in the percentage increase among zones within each tier. For example, in Tier 3, zone 132 increased 4.6%, while zone 135 rose a stunning 9.8%. The impact is as follows: PERCENT INCREASE Next Day Air Hundredweight rates increased an average of 7.8% for all tiers. There is a signiﬁcant difference between the percentage increases among zones within each tier. For example, Tier 1, zone 102 increased 5.2% while zone 108 rose a staggering 8.6%. The impact is as follows: TIER 1 2 3 4 5 6 7 100 POUNDS OR MORE 8.9 9.0 8.8 8.3 8.9 9.5 8.9 PERCENT INCREASE 2nd Day Air: A second business day delivery of both letters and packages. Letters increased an average of 8.8% (5.5–12.3%) for all zones and from $0.50–$1.45. Rates increased an average of 8.3% 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 (5.4%) 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 206–208 (9.5%) which represent the vast majority of volume. (SmartTran’s analysis shows that you can expect a 9.0% increase in 2nd Day Air charges.) SHIPPER ALERT: By reducing rates in low-utilized zones and substantially increasing rates in high volume zones, UPS touts an average increase that is clearly understated. The rates for this service average 49.2% off of the Next Day Air rate for 1–30 pound packages, and 41.9% off 31–150 pound packages. Table 4 summaries the impact of the increase. TIER 1 2 3 4 5 6 7 100 POUNDS OR MORE 7.8 7.8 7.8 7.8 7.9 7.9 7.9 Next Day Early AM: 8:00 AM delivery of U.S. domestic letters, documents and packages from most metropolitan areas. In addition, 8:30 AM delivery is available from virtually all overnight shipping locations coast to coast. Add $31.00 to the appropriate Next Day Air rate. This is a $2.50 increase from the $28.50 differential that existed for many years. Next Day Air Saver: 3:00 PM or 4:30 PM delivery to commercial destinations where UPS Next Day Air is committed by 10:30 AM or noon, respectively. Residential deliveries to UPS Next Day Air Saver destinations receive delivery by end of day. Letters increased an average of 8.5% (5.2–9.5%) for all zones and from $0.65–$1.90. Package rates increased an average of 8.9% for 1–70 pound packages. The rates for this service average a mere 5.1% off of the Next Day Air rate. Have you noticed that the price difference between Next Day Air and Next Day Air Saver has tightened over the years? It’s true! Last year they were 7.3% off of the Next Day Air rate, now it is only 5.1%. In fact, there is very little difference in price between Next Day Air and Next Day Air Saver for zones 103 (132) to 108 (138) for packages weighing 20 pounds or more. UPS is clearly discouraging the use of Next Day Air Saver through its pricing strategy. Table 3 summarizes the impact of the increase. TABLE 4 – SECOND DAY AIR (percent increase) lbs/zone 1–15 16–70 71–150 TOTAL 202 203 204 205 206 207 208 Total 5.4 5.4 5.3 7.5 9.5 9.5 9.5 8.1 5.4 5.4 5.4 7.5 9.5 9.5 9.5 8.3 5.3 4.8 5.4 7.1 9.3 9.4 9.5 8.1 ––––––––––––––––––––––––––––––––––––––––––––– 5.3 4.9 5.4 7.2 9.4 9.4 9.5 8.2 2nd Day Air Hundredweight rates increased an average of 7.9% for all tiers. There is a signiﬁcant difference in the percentage increase among zones within each tier. For example, in Tier 3, zone 202 increased 4.7%, while zone 208 rose a whopping 9.4%. The impact is as follows: PERCENT INCREASE TABLE 3 – NEXT DAY AIR SAVER (percent increase) lbs/zone 1–15 16–70 71–150 TOTAL 132 133 134 135 136 137 138 Total 5.4 7.4 8.2 8.2 8.0 8.7 8.5 8.0 5.4 7.5 9.4 9.4 9.4 9.4 9.4 9.0 5.0 7.4 9.4 9.4 9.5 9.4 9.4 8.9 ––––––––––––––––––––––––––––––––––––––––––––– 5.1 7.4 9.3 9.4 9.4 9.4 9.4 8.9 TIER 1 2 3 4 5 6 7 100 POUNDS OR MORE 7.9 7.8 7.9 8.0 7.9 8.0 8.0 22 JANUARY - FEBRUARY 2009 / www.PARCELindustry.com http://www.PARCELindustry.com

Table of Contents Feed for the Digital Edition of Parcel - January/February 2009

Parcel - January/February 2009 Contents Editor’s Note Going Global Transportation ABCs Mastering Management Regional Alternatives Practical IT Best Practices Packaging 12th Annual UPS Rate Analysis Navigating Dim Weight Charges More than Just a Postscript Understanding RFID PARCEL Counsel New Products Reality Check

Parcel - January/February 2009

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