Subscribe to our free, weekly email newsletter!


UPS Freight announces mid-year rate increase

By Jeff Berman, Group News Editor
July 02, 2012

The mid-year less-than-truckload (LTL) rate hike is nearly complete, with UPS Freight, the LTL subsidiary of UPS announcing a general rate increase (GRI) of 5.9 percent, effective July 16.

UPS Freight officials said this GRI applies to minimum charge, LTL rates, and accessorial charges.

UPS Freight follows other LTL players, whom recently announced rate hikes, including: YRC Freight (6.9 percent GRI, effective July 9); FedEx Freight (6.9 percent, effective July 9); Con-way Freight (6.9 percent, effective July 9); and ABF (6.9 percent, date not made available).

As LM has reported, the LTL sector has made up significant ground from the depths of the Great Recession. This is due, in part, to tighter capacity and steady rate gains since 2010.

What’s more, there are many drivers contributing to the turnaround occurring in the LTL sector, including a sharp focus on yield management and contractual relationships, coupled with an ongoing commitment to service reliability. But even with this positive momentum, it is clear challenges still remain as volumes and the general economy remain below pre-recession levels seen in 2007 and earlier.

“In LTL, a much smaller percentage number of customers experience these rate increases,” said Satish Jindel, president of SJ Consulting. . “LTL’s have to cover the higher costs of supporting all their customers from a smaller group of customers [with the 6.9 percent GRI]. And the LTL industry as a whole struggles with getting a return on its operations.”

When asked about the many factors that come into play when making pricing decisions, UPS Freight President Jack Holmes said a few different things are on the list.

“We have a long-term look at this industry to make the investments we need to make, and there is not going to be a lot out there to influence us not to make a decision that we know is going to be beneficial three or five years out,” he explained. “As far as the industry and pricing goes, from our perspective we have taken a prudent approach to take the volatility out of it and it will be interesting to see how that is perceived in the industry going forward.”

About the Author

Jeff Berman headshot
Jeff Berman
Group News Editor

Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. .(JavaScript must be enabled to view this email address).


Subscribe to Logistics Management magazine

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your
entire logistics operation.
Start your FREE subscription today!

Recent Entries

For November, which is the most recent month for which data is available, the SCI came in at -3.2. While this is still entrenched in negative territory, it represents an improvement over October and September, which were -5.5 and -6.6, respectively.

Total December shipments––at 1,150,810––were 3 percent better than November and up 5 percent annually. And total 2014 shipments––at 14,092,551––were up 5.61 percent, setting a new record for annual shipments during the time which Panjiva has been collecting this data since 2007.

The biggest story in the energy sector has to be the 30% decline in oil prices since June to a level not seen since the global recession cut a whopping 6% from global consumption back in 2009.

The challenge for air cargo operators to fill capacity, and the confidence to add capacity, remain the same as the demand curve for air freight services recovers.

For the fourth quarter of 2014, UPS said it anticipates adjusted diluted earnings per share of roughly $1.25, with full-year 2014 adjusted diluted earnings per share at $4.75, which represents a 3.9 percent annual gain over 2013’s adjusted earnings per share of $4.57, with full-year 2014 diluted earnings pegged at around $3.28 per share, which is 28.9 percent below 2013’s $4.61.

Article Topics

News · All topics

Comments

Post a comment
Commenting is not available in this channel entry.


© Copyright 2013 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA