Delivery giant UPS says 5 percent rise in freight rates for overland, air and freight

UPS is raising ground, air and cargo charges by average of around 5 percent as it pursues to increase revenue that has declined this year. According to the Atlanta-based package delivery company cargo rates will raise an average of 4.9 percent, and on Dec. 28, rates on road delivery will rise 4.9 percent and air cargo worldwide services will increase about 5.2 percent.

According to the spokesperson of United Parcel Service Inc. Steve Gaut some heavy freight customers and traders could realize higher or slighter growths than the averages, but he dropped to give specifics. He further stated that the UPS looked-for the rises to cover increasing labor and equipment charges and to be rewarded equally for its services.

UPS will also increase prices for fuel and heavy packages delivery. The fuel price on road deliveries will increase from its present 4.75 percent to 5.25 percent. For air cargo and global packages delivery, the price will go from 3 percent to 4.5 percent.

The fuel prices adjust on monthly basis and are attached to diesel and airline fuel prices. As a consequence, lower energy prices upset the UPS revenue, which was uniform from January to June of 2015 after increasing 5 percent in 2014. But low-priced fuel intensely drops the costs of the company and has assisted it increase revenue.

In the starting period of this year 2015 from January to June, remaining revenue surged to $2.26 billion, up 65 percent from the same period last year, when results were upset by a $665 million charge related to health plans. The company has kept $669 million, or 34 percent, on its fuel expenses this year as compared with the first half of the previous year 2014.

The shares of the company closed at $103.80, up 94 cents. In extended trading after the rate rises were declared, they were up 20 cents more to $104. The company shares have fell approximately 7 percent in the current year 2015.