Well it’s that time of year again when the transportation industry announces their General Rate Increases for the upcoming year. The major parcel carriers, UPS and FedEx, have announced increases to become effective on January 4, 2010. Here is a brief overview of the projected increases. In our December 2009 issue of “Logistics Strategies, ” Jack Mitchell, President of Parcel Appraisal and Negotiations Consulting Group, will provide us with an in-depth analysis of each carrier’s General Rate Increase. You won’t want to miss next month’s issue of “Logistics Strategies.”

UPS General Rate Increases:

UPS’ small package Daily and Retail rates will change as follows:

UPS Ground Service will increase 4.9%.

UPS Air and International Services will increase a net 4.9% through a combination of a 6.9% increase in the base rates and a 2% reduction in the fuel surcharge.

UPS will also re-align their fuel surcharge calculations to provide for a more stable surcharge structure when fuel prices fluctuate.

FEDEX General Rate Increases:

FedEx Express package and freight rates will increase 5.9%, however the rate increase will be partially offset by adjusting the fuel surcharge calculation.

FedEx will also change the following rate categories:

· FedEx Express US Import Rates

· FedEx Express US Rates to Puerto Rico

· FedEx International Premium Rates

· FedEx International Priority and International Economy Rates

As always these rate increases will require a comprehensive analysis by each shipper to ascertain the impact to the individual shipper. It is also critical to point out that the major motor carriers, including UPS Freight and FedEx Freight, will also increase their rates in January, 2010. We will provide more details as they become available.

Tony Nuzio