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UPS Hikes Fuel Fee for Forwarders

UPS Air Cargo told freight forwarders it will raise the fuel surcharge for their shipments on April 24, ending several months in which UPS held that fee steady while jet fuel prices moved higher.

The new fuel fee on U.S.-origin freight will be 55 cents per kilogram, up from 50 cents recently and matching the highest level that surcharge reached last fall. It compares with a 40-cent surcharge that UPS Air Cargo had on April 24, 2005.

This surcharge hike for forwarder-supplied freight does not affect fees on the regular UPS package business with the public, which the company announces separately. The UPS fuel fee for air package shipments remains for now at the same 12.5-percent level it has held since October.

But James Owens, UPS vice president for cargo, said in a letter posted on the company's Web site that the time has come to raise the fee at the unit that works with forwarders.

"Over the past several weeks, jet fuel prices have continued to steadily climb," Owens said. "Because jet fuel is one of the largest cost drivers for our airline, UPS Air Cargo has recognized that we cannot continue to maintain our current fuel surcharge."

In evaluating its fuel fee, UPS like other carriers tracks the U.S. Energy Department's jet fuel price index for the Gulf Coast region.

That index surged last fall after Hurricanes Katrina and Rita ravaged the area, to peak at nearly $2.40 a gallon in October, but it fell sharply in November.

It edged mildly higher in December, and January brought a spike of about nine cents, but the monthly average slid about six cents in February. However, March saw a sustained rise as the price rose more than 12 cents to over $1.87, and April has seen more gains.

 

 


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