We use cookies to provide you with a better experience. By continuing to browse the site you are agreeing to our use of cookies in accordance with our Cookie Policy.
  • INDUSTRY PRESS ROOM
  • ABOUT
  • CONTACT
  • MEDIA FILE
  • Create Account
  • Sign In
  • Sign Out
  • My Account
Free Newsletters
  • MAGAZINE
    • Current Issue
    • Archives
    • Digital Edition
    • Subscribe
    • Newsletters
    • Mobile Apps
  • TRANSPORTATION
  • MATERIAL HANDLING
  • TECHNOLOGY
  • LIFT TRUCKS
  • PODCAST ETC
    • Podcast
    • Webcasts
    • Blogs
      • One-Off Sound Off
      • Global Logistics and Risk
      • Empowering Your Performance Edge
      • Analytics & Big Data
      • Submit your blog post
    • Events
    • White Papers
    • Industry Press Room
      • Upload Your News
    • New Products
      • Upload Your Product News
    • Conference Guides
    • Conference Reports
    • Newsletters
    • Mobile Apps
  • DCV-TV
    • DCV-TV 1: News
    • DCV-TV 2: Case Studies
    • DCV-TV 3: Webcasts
    • DCV-TV 4: Viewer Contributed
    • DCV-TV 5: Solution Profiles
    • ProMat 2023
    • Upload Your Video
  • MAGAZINE
    • Current Issue
    • Archives
    • Digital Edition
    • Subscribe
    • Newsletters
    • Mobile Apps
  • TRANSPORTATION
  • MATERIAL HANDLING
  • TECHNOLOGY
  • LIFT TRUCKS
  • PODCAST ETC
    • Podcast
    • Webcasts
    • Blogs
      • One-Off Sound Off
      • Global Logistics and Risk
      • Empowering Your Performance Edge
      • Analytics & Big Data
      • Submit your blog post
    • Events
    • White Papers
    • Industry Press Room
      • Upload Your News
    • New Products
      • Upload Your Product News
    • Conference Guides
    • Conference Reports
    • Newsletters
    • Mobile Apps
  • DCV-TV
    • DCV-TV 1: News
    • DCV-TV 2: Case Studies
    • DCV-TV 3: Webcasts
    • DCV-TV 4: Viewer Contributed
    • DCV-TV 5: Solution Profiles
    • ProMat 2023
    • Upload Your Video
Home » UPS Freight hikes non-contract rates 6.9%
newsworthy

UPS Freight hikes non-contract rates 6.9%

July 1, 2011
Mark B. Solomon
No Comments

UPS Freight, the less-than-truckload (LTL) unit of transport and logistics giant UPS Inc., today announced a 6.9-percent general rate increase on North American non-contractual shipments, the unit's second non-contract rate increase in the past 10 months.

The increase, which takes effect Aug. 1, follows a 5.9-percent rate hike implemented last October. Nearly half of UPS Freight's business moves under tariffs rather than through contractual relationships. UPS Freight is the nation's fourth-largest LTL carrier.

UPS Freight spokesman Ira Rosenfeld said the increase reflects the costs of investments made in new technology, equipment, and network improvements. It also helps the trucker offset what has been, until recently, a significant escalation in diesel fuel prices, Rosenfeld said.

Rosenfeld said the rate increase was not aimed at culling unprofitable freight from the carrier's system by forcing some shippers to pay more or look elsewhere for service. The spokesman added that the hike doesn't reflect a tightening of capacity, saying that space remains fairly abundant across its network.

The move by UPS Freight comes as the LTL sector, which has been battered in recent years by weak demand, overcapacity, and destructive rate wars, seems to be turning the corner. In a research note issued today before the UPS Freight announcement, investment firm Wolfe Trahan said that with the exception of troubled YRC Worldwide Inc., it expects all of the publicly traded LTL carriers to be profitable in the second quarter. That would be the first time in nearly three years that so many of the carriers would be in the black in the same quarter, the firm said.

In the note, the firm said LTL pricing is "going in the right direction as the largest carriers remain very focused on improving rates." The firm forecasts that second-quarter yields—measured in revenue per hundredweight net of fuel—will increase 4.9 percent from the same period a year ago. That is up from a 2.8-percent yield improvement year over year in the first quarter.

Carriers will also benefit from what has been a dramatic drop in diesel fuel prices. As of June 27, the average nationwide price for a gallon of diesel stood at $3.88, a near 20-cent a gallon drop from April levels, according to the Department of Energy's Energy Information Administration.

Last week, FedEx Freight, a unit of FedEx Corp. and the nation's largest LTL carrier, announced that it returned to profitability in its fiscal fourth quarter after six consecutive quarters of operating losses. Yield rose 13 percent in the quarter over the same period a year ago, with about one-third of that gain due to the impact of higher fuel surcharges. The balance of the yield gains came from actions that effectively took less-profitable freight out of the unit's network, as evidenced by an 8-percent decline in its average daily shipment count.

As carriers report second-quarter results, it is expected that tonnage growth will have decelerated due to a general economic slowdown and tighter inventory controls that have reduced retailer ordering and manufacturing output. However, the industry got some positive news today when the Institute for Supply Management's (ISM) manufacturing purchasing management index expanded to 55.3 percent from 53.5 in May. Many economists had predicted a further decline in June from the May results. Pricing pressures lessened, while inventory builds picked up slightly, the report said.

According to Wolfe Trahan, LTL tonnage historically has a 76-percent correlation with the ISM index results.

Transportation Trucking Less-than-Truckload
KEYWORDS FedEx Freight UPS Freight
    • Related Articles

      ABF hikes non-contract rates by 6.9 percent

      YRC hikes rates on non-contract shipments

      UPS announces 2012 non-contract rate hikes

    Marksolomon
    Mark Solomon joined DC VELOCITY as senior editor in August 2008, and was promoted to his current position on January 1, 2015. He has spent more than 30 years in the transportation, logistics and supply chain management fields as a journalist and public relations professional. From 1989 to 1994, he worked in Washington as a reporter for the Journal of Commerce, covering the aviation and trucking industries, the Department of Transportation, Congress and the U.S. Supreme Court. Prior to that, he worked for Traffic World for seven years in a similar role. From 1994 to 2008, Mr. Solomon ran Media-Based Solutions, a public relations firm based in Atlanta. He graduated in 1978 with a B.A. in journalism from The American University in Washington, D.C.

    Recent Articles by Mark Solomon

    Coming together for road safety: interview with Joshua Girard

    Off the rails

    Freight rate spikes shaking up the C-suite

    You must login or register in order to post a comment.

    Report Abusive Comment

    Most Popular Articles

    • Boston Dynamics will deploy fleet of robots in German e-tailer’s DCs

    • InPerson interview: Geoff Muessig of Pitt Ohio

    • TradeBeyond Acquires Pivot88

    • U.S. manufacturing resurgence faces headwinds

    • Warehouse yards to go digital

    Now Playing on DCV-TV

    20230922intralox vs large

    Intralox Parcel Automation: Never Stop Moving

    DCV-TV 4: Viewer Contributed
    Your business—and the flow of products through it—never stops. Intralox’s logistics and material handling specialists have the technologies, services, and expertise to keep you moving.

    FEATURED WHITE PAPERS

    • Rodent Radar: A Guide To Help Protect Your Business From Rodents

    • The Value of Genuine Parts and Service

    • Five questions to ask before electrifying your indoor forklift fleet

    • Unlock Success with Our Freight Tech Checklist!

    View More

    Subscribe to DC Velocity Magazine

    GET YOUR FREE SUBSCRIPTION
    • SUBSCRIBE
    • NEWSLETTERS
    • ADVERTISING
    • CUSTOMER CARE
    • CONTACT
    • ABOUT
    • STAFF
    • PRIVACY POLICY

    Copyright ©2023. All Rights ReservedDesign, CMS, Hosting & Web Development :: ePublishing