Short Notice: UPS gives customers 21 days to implement 2019 rate hikes
Atlanta-based UPS (NYSE:UPS) said late yesterday that a slate of 2019 rate increases will take effect Dec. 26, 2018. It is not unusual for UPS to set the effective date of its calendar year rate changes for the end of the prior year. What is unusual is the timing of this year’s announcement. UPS disclosed its 2018 rate increases on October 25, 2017, and its 2017 increases on September 1, 2016, according to Shipware, LLC, a consultancy.
By contrast, Memphis-based FedEx Corp., (NYSE:FDX) UPS’ chief rival, disclosed its 2019 rate adjustments on Nov. 5. When asked if there was any specific reason that UPS waited until today to announce its 2019 adjustments, a company spokesman gave a one-word reply: “No.”
UPS-watchers had telegraphed for weeks their concern that the company was waiting an unusually long time to go public with its rate announcement. Jerry Hempstead, a long time parcel executive who today runs a consultancy, said the 21-day notice period will impose “a real burden on IT departments” to input the changes as they manage through which for many businesses is their busiest period of the year. UPS has 1.5 million regular pick-up and 9 million delivery accounts worldwide.
For 2019, UPS’ rates will rise 4.9 percent across most of the company’s portfolio (UPS Freight, its less-than-truckload unit, is not covered by today’s announcement.) FedEx will impose the same increase on its air express and ground parcel movements. Rates for shipments moving on FedEx Freight, its LTL unit, will rise by 5.9 percent.
All of FedEx’s increases take effect Jan. 7. That means UPS’ increases will impact shipments of post-holiday returns that will mostly occur during the first calendar week of 2019, while FedEx’s will not.