On Feb. 5, as it does every year at about that time, United Parcel Service (UPS), the nation's largest package carrier, implemented its annual general rate increases.

This year's rate increase for UPS's Commercial Ground service was a modest 3.1 percent—just about identical to last year's increase. That is lower than the hikes we saw in last fall's round of LTL motor carrier general rate increases, most of which fell in the range of 5.5 to 5.9 percent.

For residential deliveries, UPS tacked on an additional 5 cents per package, raising the previous differential of $1.00 per package between commercial and residential deliveries to $1.05, a 5.0-percent hike. In the case of air-express rates—Next Day Air, 2nd Day Air, and 3-Day Select—UPS boosted its rates by 3.7 percent. Meanwhile, competitor FedEx Express increased its domestic air rates by 4.9 percent, effective Feb. 1.

Both UPS and FedEx Express increased their international export rates by 2.9 percent on Feb. 5 and 1, respectively. UPS's fuel surcharge of 1.25 percent, which has been in effect since last August, however, remains unchanged.

Every time rates go up, shippers look for ways to cut costs. One money-saving approach to investigate is how you can maximize package weights without exceeding the UPS or FedEx package-dimension limits.

Any time you see a shipment with a number of small, lightweight packages on your shipping or receiving dock, it could signal that an opportunity exists for combining two or more packages into a single shipping unit.

Probably the best way to illustrate the potential savings that could be realized by maximizing package weights would be to convert UPS Commercial Ground service per-package rates into rates per pound, as we have done in the accompanying table using selected Zone 1 rates (the shortest hauls).

One way to maximize package weights would be through the use of master cartons that hold two or more smaller packages. The reduction in per-pound rates could more than offset the added cost of such cartons. Keep in mind, too, that the banding of multiple packages is permissible, subject to certain conditions. (See Pages 12, 13, and 19 of the UPS Rate and Service Guide.)