UPS to Lift Upper Limit on Air Fuel Surcharge

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PS Inc. said this week it will remove the current 12.5% limit on its air fuel surcharges next month, in light of rising oil prices.

The cap will rise to 16% on June 5, which will put its surcharges in line with competitors such as FedEx Corp., UPS spokesman Norman Black told Transport Topics on Wednesday.

For most of the past two years the cap was 9.5%. When oil prices spiked last fall following the big hurricanes, the company raised it to 12.5%, Black said.

"Jet fuel is the most volatile of the fuel price mix," Black said. With oil prices rising 21% since late last year, the company has had to recalculate its charges, he told TT.

Air surcharges are generally higher than ground charges, which are based on government diesel prices, he said.

UPS is indexing fuel surcharges along with abandoning the cap, which will help mitigate the charge somewhat. Without the indexing, the charge would have risen to 18%, Black said.

The charge changes monthly on a lagging basis and could drop lower should oil prices recede, he said. The information on the change is also on the company’s Web site.

UPS is ranked No. 1 on the Transport Topics 100 listing of U.S. and Canadian for-hire carriers.