UPS Raises Shipping Rates

Thursday, December 28th 2000, 12:00 am

By: News On 6

ATLANTA (AP) â€” Following the lead of rival FedEx Corp., United Parcel Service said Thursday it will increase its air shipment rates 3.7 percent effective Feb. 5. International shipments will rise 2.9 percent.

Ground service â€” the bulk of UPS's business â€” will rise 3.1 percent for all weights and zones, and the fee for residential deliveries will increase from $1 to $1.05 on all packages.

The Atlanta-based company also said it will keep the 1.25 percent fuel surcharge it began assessing in August ``with the hope that fuel prices will eventually stabilize at lower levels.''

FedEx announced Wednesday that it will increase U.S. air express rates 4.9 percent on Feb. 1. UPS said it would publish the new rates Jan. 4 on its Web site.

UPS spokesman Steve Holmes said rate increases are planned months before they are announced and that similarities with FedEx's prices are ``mere coincidence.''

``The wheels are turning on putting rates together way before we know what a competitor is doing,'' Holmes said.

On Dec. 14, UPS warned that it would earn 60 to 62 cents per share for the fourth quarter, down from the 64 cents per share forecast by analysts surveyed by First Call/Thomson Financial.

UPS' earnings revision follows slowing growth in domestic volume in October and November to 4 percent, compared with 5.5 percent growth for the first nine months of the year.

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On the Net: http://www.ups.com