BirdDog 2015 GRI White Paper Part 1: UPS

The Impact of the 2015 UPS General Rate Increase

22015 UPS GRI

2015 UPS & FedEx Rate Increase Series

Every year UPS® and FedEx® announce new rates for their ground and air services—and the impact on parcel shippers can be substantial. In addition, in 2015 both carriers expanded the dimensional (DIM) weight pricing to include all ground packages. Previously, DIM weight pricing was applied only to packages that were three cubic feet or larger.

The BirdDog Solutions® professional services team of analysts, engineers and consultants have reviewed and provided unbiased perspective on the published 2015 general rate increase (GRI) for each of these carriers. A clear understanding of this, as well the new DIM pricing (www.birddog.com/DIM) will give savvy shippers a competitive advantage via their parcel shipping program.

This two-part series provides visibility into all the new package rates and presents the cost impact that parcel shippers should expect. In part 1, we’ll look at UPS.

UPS Quick Facts

• Announced 4.9% average increase for UPS Ground, Air and International services

• Announced 4.9% average increase for UPS Air Freight and UPS Freight® services

• Dimensional weight pricing now applies to all UPS Ground and UPS Standard to Canada

http://savings.birddog.com/DIM.html?utm_source=gri

32015 UPS GRI

Summary of 2015 UPS GRI UPS announced that air and ground rates increased an average of 4.9% on January 1, 2015. However, when we break down the rates by specific weights and zones, we see that many shippers will actually see a much higher increase.

Our analysis shows that, when factoring out accessorials, the average increase across all service levels for a single package shipped to zones two through eight this year is 5.92%, only 4/100ths of a percentage point down from 2014. The average increase for ground packages up to 150 pounds is 2.97% and air services ranges from 5.11% to 7.15%. When we look at where the majority of shipments fall, we see that lightweight shippers will realize a higher than average increase with UPS Ground. One to 30-pound shipments will actually see increases of 5.18% to 6.36% (see Chart 1). And for UPS air services, the increase for the 1 to 30-pound shipments ranges from 2.88% to 7.93% (see Tables 2, 4, 6 ).

Also this year, instead of relying solely on a package’s weight, the new DIM weight rate formula charges based upon the amount of space the packages occupy. Previously, only packages three cubic feet and larger were subject to this price structure but as of 2015, all ground shipment pricing will be calculated by DIM.

Couple the GRI with the shift to DIM to determine the billable weight for all packages and the results are significant price increases well above the published 4.9% GRI for most business to consumer (B2C) ecommerce and omnichannel retailers. As the e-commerce industry continues to grow, the impact that the UPS rate increases have had on parcel shippers is significant. They continue to be faced with annual increases that far out pace the rate of inflation. In order to make informed decisions surrounding your parcel expenditures and operations, it’s important to first understand the data.

% increase

Domestic Service 2011 2012 2013 2014 2015 Average

Next Day Air Early A.M. 6.75% 6.39% 5.74% 4.94% 5.11% 5.79%

Next Day Air 7.97% 7.54% 7.18% 5.67% 5.79% 6.83%

Next Day Air Saver 8.39% 7.61% 7.65% 5.99% 6.15% 7.16%

2nd Day Air A.M. 6.13% 6.45% 8.15% 7.13% 7.15% 7.00%

2nd Day Air 6.14% 7.49% 8.13% 7.19% 7.12% 7.21%

3 Day Select 8.08% 7.95% 8.65% 6.41% 7.14% 7.65%

Ground* 4.02% 4.05% 4.99% 4.41% 2.97% 4.09%

Average 6.78% 6.78% 7.21% 5.96% 5.92% 6.53%

Table 1. Five-year average increase for UPS air and ground services (accessorial fees have been removed).

*Note this does not include the effect of Dimensional weight pricing.

Our methodology : The carriers publish their GRI of 4.9% as an average. We look at just the average from the rate cards, removing the accessorials from our analysis. This gives the most general review of the increases as all package costs begin with the rate and the added surcharges can greatly vary. Accessorials are addressed separately at the end of the paper.

42015 UPS GRI

UPS Air RatesNext Day Air Rates

For UPS Next Day Air Early A.M. and Next Day Air services, there are higher than average rate increases for many of the heavier packages (31-150 lbs.) to zones 4 through 8. On the other hand, shippers using UPS Next Day Air Saver will notice a higher increase for lighter packages moving to lower zones. It’s important to first understand the data.

Weight Range (in pounds) across Zones 2-8

Air Service 1 to 5 6 to 10 11 to 30 31 to 50 51 to 70 71 to 150

Next Day Air Early A.M. 2.80% 3.11% 5.18% 5.67% 6.24% 4.94%

Next Day Air 4.49% 4.47% 6.50% 6.57% 7.00% 5.28%

Next Day Air Saver 6.41% 6.42% 6.44% 6.43% 6.34% 5.93%

Tables 2 and 3. Average increase for UPS Next Day Air services in specific weight ranges and zones.

By Zone across Weight Ranges (1-150 pounds)

Air Service 2 3 4 5 6 7 8

Next Day Air Early A.M. 2.67% 3.38% 5.63% 6.13% 5.46% 6.04% 6.46%

Next Day Air 3.43% 4.13% 6.34% 6.82% 6.07% 6.65% 7.10%

Next Day Air Saver 7.85% 7.83% 6.74% 5.29% 4.95% 5.17% 5.23%

Rate increases higher than the average increase in Table 1

2nd Day Air Rates

BirdDog analysis shows the average increase for 2nd Day Air A.M. is 7.15% while the increase for 2nd Day Air is 7.12%. Both of these are significantly larger than the announced 4.90% for Air services. Tables 4 and 5 show that the rates for all 2nd Day Air weight ranges and zones are larger than the announced average. Further analysis reveals that higher weight packages to lower zones receive the greatest rate increase (7.71%-8.52%).



2nd Day Air A.M. 7.04% 7.02% 7.07% 7.10% 7.11% 7.20%

2nd Day Air 7.03% 7.05% 7.08% 7.10% 7.10% 7.15%

Tables 4 and 5. Average increase for UPS 2nd Day Air services in specific weight ranges and zones.



2nd Day Air A.M. 7.71% 8.19% 8.51% 7.97% 5.20% 5.68% 6.78%

2nd Day Air 7.79% 8.04% 8.52% 7.91% 5.18% 5.62% 6.77%


52015 UPS GRI

3 Day Select

Historically, 3 Day Select service has received the largest increase relative to other services. This year, the UPS 3 Day Select increase is 7.14%, which is very similar to the 2nd Day service increases. As with ground services (referenced in the next section), lighter weight packages are affected the most. The 3 Day Select increase differs from the ground increase when looking at the impact to certain zones. The increase to 3 Day Select is greater on packages to longer zones, while ground has a larger increase in shorter zones.

3

Tables 6 and 7. Average increase for UPS 3 Day Select service in specific weight ranges and zones.



3 Day Select 7.93% 7.89% 7.28% 7.16% 7.14% 7.01%



3 Day Select 5.95% 6.10% 6.40% 7.85% 7.90% 7.90% 7.92%


62015 UPS GRI

UPS Ground RatesGround rates for lightweight packages will increase dramatically again in 2015

Late in 2014, following the FedEx announcement, UPS announced that ground services rates would also increase an average of 4.9%. Factoring out accessorial charges, the average increase for all package weights, zones two through eight, is actually only 2.96% (compared to 4.41% last year), whereas the lighter weight shippers (1-20 lbs.) actually see increases of 5.54% to 6.36%.

Keeping in mind that 2.96% is an average increase across all weights and zones, the impact to most shippers becomes more apparent when looking at the average increase across specific weight groups and zones. Lighter weight shippers will bear the brunt of the increase, even more so than in previous years. Chart 1 shows the average increase for packages that fall into typical carrier weight groupings. For a complete list of rate increases by weight across zones 2 through 8, please refer to Appendix A.

Chart 1. 2015 UPS domestic average ground rate increase by package weight across Zones 2-8.

Package Weight Ranges (in pounds)

Note: Percent increases are calculated by taking the average of a percent increase rate card. These values include single piece packages (excluding Hundredweight) shipped within the continental US.

Greater than 4.9% increase.

1-5 6-10 11-15 16-20 21-25 26-30 31-50 51-70 71-150

Per

cent

Incr

ease

5%

5.5%

6%

6.5%

4.5%

4%

3.5%

2.5%

2%

72015 UPS GRI

Minimum Net Charges One of the most overlooked areas of the annual rate increase is the impact of the minimum net charge. While originally designed to ensure a minimum revenue per package for the carrier, the minimum net charge can actually prevent shippers from receiving the full benefit of other negotiated discounts. Most UPS contracts specify the published rate for a zone two, one-pound package as the minimum net charge.

Ground Minimum Net Charge Increases to $6.61

The zone two, one-pound rate is increasing by 5.93% from $6.24 in 2014 to $6.61 in 2015 and the impact of this change to lightweight parcel shippers could be significant. As Chart 2 illustrates, the zone two, one-pound rate (the minimum net charge) has increased 45% from $4.57 to $6.61 in just six years.

Air Minimum Net Charges also increase

As seen in Table 8, four of the six air services have increases higher than 4.9%, with the 3 Day Select service topping out at 8.18%. Although next day services are increasing at a low pace, the hefty rates do put a great burden on shippers who have more and more customers demanding immediate gratification of their online shopping experiences.

2009 2010 2011 2012 2013 2014 2015

Chart 2. 2015 UPS Ground Minimum Net Charge rates from 2009 to 2015.

$7.00

$6.00

$5.00

$4.00

$3.00

$2.00

$1.00

$0.00

$4.

57

$4.

84 $5.

17

$5.

49

$5.

84 $6.

24

$6.

6145% increase

Air Service 2014 2015 % Increase

Next Day Air Early A.M. $54.15 $55.15 1.85%

Next Day Air $24.15 $25.15 4.14%

Next Day Air Saver $20.65 $22.25 7.75%

2nd Day Air A.M. $15.65 $16.85 7.67%

2nd Day Air $13.60 $14.65 7.72%

3 Day Select $7.95 $8.60 8.18%

Table 8. A comparison of UPS Air Minimum Net Charge rate changes from 2014-2015.

Rate increases higher than seen in Table 1.

2009 2010 2011 2012 2013 2014 2015

82015 UPS GRI

Accessorial Charges Carrier accessorial charges often go unnoticed, despite the fact that they drive a large portion of the cost that shippers realize on their weekly invoices. It is difficult to manage budgeting and forecasting without clear visibility into frequent accessorial charges. Because accessorial charges, such as Delivery Area Surcharges (DAS), Large Package Surcharges and Address Corrections, are often added after the fact, it is also difficult for a shipper to pass these charges along to customers. Here are the key charges that shippers should understand.

Residential Surcharge: The Ground Residential Surcharge for 2015 increased $.20 (6.9%) as compared to only $.10 last year. The 6.9% year-over-year rate change is the highest increase of all accessorial charges in 2015. The Air Residential Surcharge is up 4.48% for 2015 or 27.27% over just five years.

Delivery Area Surcharge (DAS) : DAS Residential Ground moved from $2.85 in 2014 to $3.00 in 2015, an increase of 5.26%. The DAS Residential Air charge has increased by 4.41%.

DAS Extended: The ground service charge to rural addresses is $3.77, a 4.14% increase from 2014, while the air surcharge is up 4.11% year-over-year. This surcharge for ground service has seen a five year increase of 25.67%!

Address Correction: The Address Correction accessorial increase of $.15 in 2015 results in a net charge of $12.50. This surcharge has seen an increase of 13.64% over the past five years. These ongoing charges can easily be detected and resolved with a compliance audit service from your parcel auditor.

See Appendix B (pg. 17) for a more complete list of the most common accessorial charges and the five year impact.

92015 UPS GRI

New Dimensional (DIM) Weight Pricing for 2015In the summer of 2014, both FedEx and UPS announced a major change to their pricing models for ground shipments. The dimensional weight calculation, once used for only ground parcels measuring more than three cubic feet and all air parcels, will now be used to determine the billable weight for all packages delivered by FedEx or UPS. Many in the industry see this change as potentially representing the largest carrier rate increase ever.

More than ever, shippers are provided the opportunity to gain a major advantage over competitors by mitigating the impact of DIM through various parcel engineering strategies, including the use of regional carriers and USPS.

The example in Table 9 shows the impact that the new DIM weight pricing will have on the published rate of a zone eight, one-pound package and a zone two, one-pound package, both with dimensions of 24”x12”x12”. In this example, the rate for a zone eight, one-pound package increased by 202%!

Table 9. 2015 Dimensional weight impact for a ground shipment.

Package Current Rate

Dimensions (in.)

Cubic Ft.

Dimensional Weight (lb.)

Dimensional Rate

Rate Increase % Increase

Zone 2, 1 Pound $6.61 24x12x12 2 20.80 $10.95 $4.34 65.65%

Zone 8, 1 Pound $8.17 24x12x12 2 20.80 $24.68 $16.51 202.08%

This big news has formed a dark cloud over many industries, and rightfully so. But there are ways for shippers to alleviate the direct impact that these new pricing guidelines have on their organization. A truly optimized parcel program can help to mitigate some of the new costs associated with these rule changes.

For additional details on the new pricing guidelines and action steps that can be taken this year, read our Guide to Dimensional Weight Pricing.

10.8 An example of domestic ground DIM weight calculation:

Box Size: 10”x11.5”x15”

Calculation: 10”x12”x15”= 1800 c.i./ 166 DIM factor= 10.8 lbs.

Net Result: The package is to be billed at the 11 lb. rate as long as the actual weight is 11 Ibs. or fewer.

10”

11.5”

DIM = 11 lbs.

15”

http://savings.birddog.com/DIM_guide.html?utm_source=gri

102015 UPS GRI

Conclusion

Lightweight residential shippers to see major impact of the 2015 rate increase

As in previous years, lightweight, residential shippers will bear the brunt of this year’s rate increase. To understand the impact you must consider the heavy increases to lighter weight packages in general (see Chart 1, pg 6), the dramatic increase to the Minimum Net Charge (Chart 2, pg 7) and the yearly increases to typical accessorials such as the Residential Surcharge (Chart 3, below) and the DAS. For example in Chart 3, there is a noteworthy increase of $2.67 from 2010 to 2015 for each Zone 2, one-pound package shipped via ground service to a residential recipient; this is a 38% increase in just a six-year span.

Make engineering parcel programs a priority for 2015

As we have learned, the UPS announced rate of 4.9% is misleading for many shippers. By reducing transportation costs, parcel shippers can make other profit-generating activities feasible. For example, offering free or subsidized shipping incentives has been proven to reduce shopping cart abandonment and increase sales. But, before shippers sit down to negotiate the best rates with carriers, they should take a look at the current parcel landscape and gain a complete understanding of the organization’s customer service and financial objectives. Laying this groundwork enables smart shippers to take advantage of their current carriers’ rate structure, and also opens up other options such as the introduction of new carriers (FedEx, regional carriers, USPS), revised order cadence, mode optimization, and more.

BirdDog’s 360-degree view of the parcel market will help realize results that support growth and competitiveness, mitigate risk, save money and improve customers’ delivery experiences. To help optimize your parcel program in 2015, get a free one-hour consultation with a BirdDog parcel expert.

Chart 3. Six-year Ground Residential Surcharge impact on a zone two, one-pound shipment.

$10.00

$9.00

$8.00

$7.00

$6.00

$5.00

$4.00

$3.00

$2.00

$1.00

$02010 2011 2012 2013 2014 2015

+8.24%+5.51% 38% increase

in six years.

Residential Surcharge

Zone 2, 1 Pound Rate

+7.46%+5.79%

+6.24%

http://savings.birddog.com/One-on-One.html?utm_source=gri

112015 UPS GRI

About the AuthorDavid Sullivan Senior Consultant, Professional Services

David Sullivan specializes in small parcel (UPS, FedEx, DHL®) and LTL carrier contract and pricing agreement negotiation and optimization. Sullivan’s consultative approach has saved his clients millions of dollars in annual distribution costs. He is a graduate of Temple University and holds an MBA from Northeastern University.

About BirdDog SolutionsFounded in 1998, BirdDog Solutions is the trusted parcel partner to more than 600 high volume ecommerce, retail, omnichannel, healthcare, and B2B shippers.

BirdDog takes an analytic consultative approach to engineer a customized parcel program for each client’s unique business and shipping needs. Our team optimizes competitive carrier agreement strategies, provides detailed and secure invoice and compliance audit services, and helps you make better shipping decisions through our advanced shipping analytics and business intelligence tool.

Our parcel experts deliver results that support growth and competitiveness, mitigate risk, save organizations money, and improve inefficiencies and customer experience.

122015 UPS GRI

UPS 2015 Ground Rate Increase by Zone and Weight

Max Weight (lbs.) 2 3 4 5 6 7 8

1 5.93% 7.04% 6.99% 6.97% 6.01% 6.06% 5.97%

2 5.85% 6.85% 6.85% 6.83% 5.90% 6.76% 5.85%

3 5.76% 6.83% 6.86% 6.77% 5.77% 6.83% 5.79%

4 6.75% 6.79% 6.77% 6.81% 5.81% 6.83% 5.79%

5 5.48% 6.47% 6.51% 6.55% 5.52% 6.46% 5.50%

6 6.55% 6.54% 6.54% 6.52% 6.55% 6.50% 5.49%

7 6.52% 6.50% 6.54% 6.48% 5.48% 6.52% 5.51%

8 5.55% 6.46% 5.54% 6.45% 5.51% 6.50% 5.53%

9 5.44% 6.54% 5.46% 5.47% 5.49% 5.50% 5.51%

10 5.50% 6.51% 5.48% 5.51% 5.46% 5.47% 5.54%

11 6.46% 6.48% 5.53% 6.51% 6.46% 6.50% 6.48%

12 5.52% 6.50% 5.48% 5.53% 5.48% 5.49% 5.49%

13 5.50% 6.45% 5.51% 5.52% 5.51% 5.51% 5.52%

14 6.48% 6.48% 5.45% 5.53% 5.49% 6.52% 5.51%

15 5.54% 6.48% 6.45% 6.54% 5.47% 5.47% 5.52%

16 5.48% 6.52% 6.53% 6.52% 5.52% 6.48% 5.51%

17 6.46% 6.52% 6.49% 6.53% 5.52% 6.50% 5.51%

18 5.48% 6.52% 6.49% 6.54% 5.50% 5.49% 5.50%

19 4.51% 6.04% 4.51% 4.49% 4.52% 4.50% 4.52%

20 4.53% 4.54% 4.53% 6.01% 4.51% 4.49% 4.49%

21 6.00% 6.04% 5.98% 4.47% 4.51% 4.52% 4.49%

22 5.97% 6.02% 6.00% 6.03% 4.50% 4.50% 4.50%

23 6.00% 6.02% 5.97% 5.99% 4.49% 4.49% 4.49%

24 5.97% 5.96% 6.02% 6.00% 4.48% 4.51% 4.50%

25 4.48% 4.50% 4.47% 6.02% 4.48% 4.50% 4.49%

26 6.04% 6.01% 5.99% 6.02% 4.52% 6.01% 4.52%

27 5.99% 6.01% 4.52% 4.50% 4.51% 4.52% 4.50%

28 5.97% 6.02% 6.00% 6.00% 6.00% 6.01% 4.52%

29 6.01% 5.98% 6.03% 5.98% 6.01% 6.02% 4.51%

30 4.50% 5.97% 5.98% 6.02% 4.51% 4.51% 4.49%

31 4.51% 5.00% 3.98% 3.98% 3.98% 4.00% 4.01%

32 4.10% 4.02% 4.00% 3.98% 3.99% 3.99% 4.01%

Appendix A: UPS Ground rate increase by weight across zones 2-8 (for the 48 contiguous states)

132015 UPS GRI


Max Weight (lbs.) 2 3 4 5 6 7 8

33 4.03% 4.98% 5.03% 5.01% 4.01% 3.99% 3.99%

34 4.00% 3.97% 4.98% 4.02% 4.01% 3.99% 3.99%

35 4.01% 5.01% 4.97% 4.02% 3.99% 3.99% 3.99%

36 4.03% 5.02% 5.00% 4.98% 4.00% 3.98% 4.00%

37 4.99% 4.97% 5.01% 5.01% 3.99% 3.99% 4.00%

38 4.99% 5.02% 5.01% 4.98% 4.00% 3.99% 4.00%

39 4.99% 4.98% 5.00% 4.02% 4.01% 4.00% 4.00%

40 4.02% 4.01% 3.98% 4.02% 3.99% 4.00% 4.00%

41 3.97% 5.03% 5.01% 3.99% 4.00% 4.00% 4.01%

42 3.98% 5.02% 5.02% 3.99% 4.01% 4.01% 3.99%

43 3.99% 4.01% 4.00% 4.99% 4.00% 4.01% 4.00%

44 5.01% 5.02% 5.02% 5.02% 3.99% 4.01% 4.00%

45 4.03% 4.99% 4.98% 5.00% 3.99% 4.01% 4.00%

46 5.01% 4.00% 5.01% 4.00% 4.01% 4.00% 4.01%

47 4.97% 4.98% 5.02% 4.01% 3.99% 4.00% 4.01%

48 4.22% 4.68% 5.00% 4.02% 4.01% 4.00% 4.01%

49 4.01% 4.03% 4.01% 3.98% 3.99% 4.00% 3.99%

50 3.99% 4.01% 4.01% 4.01% 4.01% 4.01% 3.99%

51 3.85% 3.74% 3.98% 3.41% 3.65% 3.40% 3.43%

52 3.52% 3.58% 4.00% 3.30% 3.54% 2.46% 2.00%

53 2.99% 2.79% 3.60% 2.04% 3.33% 2.01% 2.01%

54 2.14% 2.01% 2.54% 2.02% 2.79% 2.00% 2.00%

55 2.00% 2.00% 2.02% 1.99% 2.67% 1.99% 2.00%

56 1.99% 1.98% 2.00% 1.99% 2.36% 1.99% 2.00%

57 3.00% 2.84% 1.99% 2.00% 2.00% 2.01% 2.00%

58 2.06% 2.04% 2.02% 2.01% 2.01% 2.00% 2.00%

59 1.98% 2.02% 2.01% 1.99% 1.99% 1.99% 2.00%

60 2.02% 2.00% 2.51% 2.01% 2.00% 2.00% 2.01%

61 2.00% 2.01% 2.06% 1.99% 2.01% 1.99% 2.00%

62 3.98% 3.78% 2.37% 2.00% 1.99% 2.00% 2.00%

63 2.00% 2.06% 2.04% 1.99% 2.01% 1.99% 1.99%

64 2.02% 2.02% 4.01% 2.62% 1.99% 2.00% 2.00%

65 1.98% 1.98% 2.95% 2.02% 2.00% 2.01% 2.01%

66 2.01% 1.99% 1.98% 2.01% 2.01% 2.00% 2.01%

67 1.98% 2.01% 1.98% 2.01% 1.99% 1.99% 2.00%

142015 UPS GRI


Max Weight (lbs.) 2 3 4 5 6 7 8

68 2.02% 2.78% 3.93% 1.99% 2.00% 2.00% 2.00%

69 2.01% 2.06% 2.02% 1.99% 1.99% 1.99% 1.99%

70 2.00% 2.01% 2.01% 1.99% 2.00% 2.00% 1.99%

71 1.73% 2.97% 1.84% 1.85% 1.87% 1.88% 1.92%

72 1.74% 2.47% 1.81% 1.86% 1.88% 1.90% 1.91%

73 1.73% 1.89% 1.82% 1.86% 1.89% 1.90% 1.91%

74 1.75% 1.81% 1.83% 1.86% 1.88% 1.91% 1.92%

75 1.78% 1.79% 1.83% 1.86% 1.89% 1.91% 1.91%

76 1.76% 1.81% 1.82% 1.86% 1.89% 1.90% 1.90%

77 1.78% 1.80% 1.82% 1.86% 1.88% 1.90% 1.92%

78 1.81% 1.81% 1.84% 1.87% 1.89% 1.90% 1.92%

79 1.78% 1.84% 1.83% 1.86% 1.90% 1.91% 1.90%

80 1.81% 1.82% 1.85% 1.86% 1.89% 1.90% 1.91%

81 1.81% 1.82% 1.84% 1.88% 1.88% 1.91% 1.92%

82 1.83% 1.85% 1.86% 1.87% 1.90% 1.91% 1.91%

83 1.81% 1.84% 1.85% 1.88% 1.90% 1.92% 1.92%

84 1.83% 1.83% 1.87% 1.87% 1.89% 1.91% 1.92%

85 1.81% 1.84% 1.86% 1.89% 1.90% 1.91% 1.91%

86 1.83% 1.86% 1.85% 1.89% 1.90% 1.91% 1.92%

87 1.84% 1.85% 1.86% 1.88% 1.90% 1.92% 1.92%

88 1.85% 1.87% 1.88% 1.87% 1.91% 1.92% 1.91%

89 1.84% 1.86% 1.87% 1.89% 1.91% 1.91% 1.93%

90 1.84% 1.86% 1.87% 1.88% 1.90% 1.91% 1.92%

91 1.84% 1.85% 1.88% 1.88% 1.90% 1.92% 1.92%

92 1.85% 1.87% 1.88% 1.90% 1.91% 1.91% 1.93%

93 1.87% 1.86% 1.87% 1.89% 1.91% 1.92% 1.92%

94 1.88% 1.88% 1.89% 1.89% 1.91% 1.92% 1.92%

95 1.86% 1.87% 1.88% 1.89% 1.92% 1.91% 1.93%

96 1.87% 1.87% 1.88% 1.89% 1.90% 1.92% 1.92%

97 1.88% 1.88% 1.89% 1.90% 1.92% 1.92% 1.92%

98 1.88% 1.87% 1.88% 1.90% 1.91% 1.92% 1.93%

99 1.89% 1.89% 1.89% 1.89% 1.91% 1.92% 1.93%

100 1.88% 1.89% 1.90% 1.91% 1.91% 1.93% 1.92%

101 1.69% 1.67% 1.69% 1.70% 1.71% 1.72% 1.73%

102 1.69% 1.69% 1.70% 1.70% 1.71% 1.72% 1.73%

103 1.69% 1.69% 1.70% 1.70% 1.71% 1.72% 1.73%

152015 UPS GRI


Max Weight (lbs.) 2 3 4 5 6 7 8

104 1.68% 1.69% 1.70% 1.70% 1.72% 1.72% 1.73%

105 1.70% 1.68% 1.70% 1.70% 1.72% 1.72% 1.73%

106 1.69% 1.70% 1.70% 1.71% 1.72% 1.72% 1.74%

107 1.69% 1.70% 1.70% 1.71% 1.72% 1.72% 1.74%

108 1.70% 1.69% 1.70% 1.71% 1.72% 1.72% 1.73%

109 1.70% 1.69% 1.70% 1.71% 1.72% 1.72% 1.73%

110 1.70% 1.71% 1.70% 1.71% 1.72% 1.72% 1.73%

111 1.70% 1.71% 1.70% 1.71% 1.72% 1.72% 1.74%

112 1.70% 1.71% 1.70% 1.71% 1.72% 1.74% 1.73%

113 1.71% 1.71% 1.70% 1.71% 1.72% 1.73% 1.74%

114 1.71% 1.71% 1.72% 1.72% 1.72% 1.73% 1.74%

115 1.71% 1.71% 1.71% 1.72% 1.72% 1.73% 1.74%

116 1.71% 1.70% 1.71% 1.72% 1.73% 1.74% 1.74%

117 1.71% 1.71% 1.71% 1.72% 1.73% 1.74% 1.74%

118 1.71% 1.71% 1.71% 1.72% 1.73% 1.74% 1.74%

119 1.71% 1.71% 1.71% 1.72% 1.73% 1.74% 1.74%

120 1.72% 1.71% 1.71% 1.72% 1.73% 1.74% 1.74%

121 1.72% 1.71% 1.71% 1.71% 1.73% 1.73% 1.74%

122 1.70% 1.72% 1.71% 1.71% 1.73% 1.74% 1.74%

123 1.70% 1.72% 1.71% 1.71% 1.73% 1.74% 1.75%

124 1.71% 1.72% 1.71% 1.72% 1.73% 1.74% 1.74%

125 1.71% 1.72% 1.73% 1.72% 1.73% 1.74% 1.74%

126 1.72% 1.72% 1.72% 1.72% 1.72% 1.73% 1.74%

127 1.71% 1.72% 1.72% 1.72% 1.72% 1.74% 1.74%

128 1.72% 1.72% 1.72% 1.72% 1.73% 1.74% 1.74%

129 1.72% 1.72% 1.72% 1.72% 1.73% 1.74% 1.74%

130 1.72% 1.72% 1.72% 1.72% 1.73% 1.74% 1.75%

131 1.72% 1.72% 1.72% 1.73% 1.73% 1.73% 1.74%

132 1.72% 1.72% 1.72% 1.73% 1.73% 1.73% 1.74%

133 1.72% 1.72% 1.72% 1.73% 1.73% 1.73% 1.75%

134 1.72% 1.72% 1.73% 1.73% 1.73% 1.73% 1.75%

135 1.73% 1.72% 1.73% 1.73% 1.73% 1.74% 1.75%

136 1.73% 1.72% 1.73% 1.73% 1.73% 1.74% 1.74%

137 1.73% 1.72% 1.73% 1.73% 1.73% 1.74% 1.74%

138 1.73% 1.72% 1.72% 1.73% 1.73% 1.74% 1.75%

162015 UPS GRI


Max Weight (lbs.) 2 3 4 5 6 7 8

139 1.73% 1.73% 1.72% 1.73% 1.74% 1.74% 1.75%

140 1.73% 1.73% 1.73% 1.73% 1.74% 1.74% 1.75%

141 1.73% 1.73% 1.73% 1.73% 1.74% 1.74% 1.75%

142 1.72% 1.73% 1.73% 1.73% 1.74% 1.74% 1.75%

143 1.73% 1.72% 1.73% 1.73% 1.74% 1.74% 1.75%

144 1.73% 1.72% 1.74% 1.73% 1.74% 1.74% 1.75%

145 1.73% 1.73% 1.74% 1.73% 1.74% 1.74% 1.75%

146 1.73% 1.73% 1.73% 1.73% 1.74% 1.74% 1.75%

147 1.72% 1.73% 1.73% 1.74% 1.74% 1.74% 1.75%

148 1.73% 1.73% 1.73% 1.74% 1.74% 1.74% 1.75%

149 1.73% 1.73% 1.75% 1.75% 1.74% 1.74% 1.75%

150 1.73% 1.73% 1.74% 1.73% 1.75% 1.75% 1.75%

99999 0.00% 2.00% 1.89% 1.85% 1.72% 1.61% 1.43%

172015 UPS GRI

Year 2015 Increase 5-year impact

Accessorial Charge 2011 2012 2013 2014 2015 $ % $ %

Additional Handling $8.00 $8.50 $8.75 $8.75 $9.00 $0.25 2.86% $1.00 12.50%

Address Correction Air $11.00 $11.00 $12.00 $12.35 $12.50 $0.15 1.21% $1.50 13.64%

Address Correction Ground $11.00 $11.00 $12.00 $12.35 $12.50 $0.15 1.21% $1.50 13.64%

Collect On Delivery Air $10.50 $11.00 $11.00 $12.00 $12.50 $0.50 4.17% $2.00 19.05%

Collect On Delivery Ground $10.50 $11.00 $11.00 $12.00 $12.50 $0.50 4.17% $2.00 19.05%

DAS Commercial Air $1.85 $2.00 $2.15 $2.25 $2.35 $0.10 4.44% $0.50 27.03%

DAS Commercial Air Extended $1.85 $2.00 $2.15 $2.25 $2.35 $0.10 4.44% $0.50 27.03%

DAS Commercial Ground $1.85 $2.00 $2.00 $2.07 $2.20 $0.13 6.28% $0.35 18.92%

DAS Commercial Ground Extended $1.85 $2.00 $2.00 $2.07 $2.20 $0.13 6.28% $0.35 18.92%

DAS Residential Air $2.75 $3.00 $3.25 $3.40 $3.55 $0.15 4.41% $0.80 29.09%

DAS Residential Air Extended $3.00 $3.25 $3.50 $3.65 $3.80 $0.15 4.11% $0.80 26.67%

DAS Residential Ground $2.75 $2.75 $2.75 $2.85 $3.00 $0.15 5.26% $0.25 9.09%

DAS Residential Ground Extended $3.00 $3.25 $3.50 $3.62 $3.77 $0.15 4.14% $0.77 25.67%

Large Package Surcharge $50.00 $55.00 $55.00 $56.60 $57.50 $0.90 1.59% $7.50 15.00%

Residential Surcharge - Air $2.75 $3.00 $3.20 $3.35 $3.50 $0.15 4.48% $0.75 27.27%

Residential Surcharge - Ground $2.45 $2.55 $2.80 $2.90 $3.10 $0.20 6.90% $0.65 26.53%

Appendix B: Common accessorial service charges for UPS Ground and Air and the impact over five years

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BirdDog 2015 GRI White Paper Part 1: UPS