UPS Lifts Rates Ahead Of Holiday Season

United Parcel Service, Inc. UPS announced an increase in its Ground, Air, International and Freight average rates. The company has announced these rate hikes a month and a half earlier than last year, Oppenheimer’s Scott Schneeberger said in a report.

Ground and Freight rates have been raised by an average net of 4.9 percent and are slated to come into effect on December 26 and September 9, respectively. UPS Air and International Services, including UPS Air Freight rates within and between the US, Canada and Puerto Rico, have been increased by an average net of 4.9 percent, with effect from December 26.

In-Line Rate Hikes

“The rate increases are relatively consistent with the average increases in the 5% neighborhood that became effective 12/28/15. The timing of this announcement comes a month and a half earlier than last year's rate increase announcement (10/16/15),” analyst Schneeberger wrote.

UPS has raised its rates ahead of the pricing update by FedEx Corporation FDX for the coming year. Schneeberger expects FedEx to announce its pricing updates along with or prior to the release of its F1Q17 results, which is slated for September 20. He added, “We look forward to incremental pricing and operational commentary from UPS in its 3Q16 earnings release on 10/27/16.”

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