UPS Ends Cap on Air Fuel Surcharge

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High fuel prices prompted UPS Inc., the world's largest package delivery company, to remove a cap on the surcharge added to air shipments.

The Atlanta company said last week that it would remove its 12.5 percent cap on the UPS air and international small package fuel surcharge June 5. The company also will recalibrate its air and international fuel surcharge index downward by 2 percentage points so that customers aren't hit with the full effect.

The surcharge is determined by the revised index. Together, the changes raise the June fuel surcharge for air shipments to 16 percent, UPS said.

The change reflects the rise of fuel prices to unprecedented levels and continuing volatility in the market, UPS said. Since October, the price of crude oil has risen more than 21 percent, the company said.

UPS uses an index-based surcharge that is adjusted monthly.

The new air fuel surcharge applies to UPS small package air services across North and South America: domestic and international services in the United States and Canada (including UPS 3 Day Select and Import Freight Collect), air services between the U.S. and Puerto Rico, and international services in Latin America and Puerto Rico (including Import Freight Collect).

The Ground fuel surcharge index remains the same.

UPS and rival shipper FedEx Corp. use surcharges on worldwide air shipments to reduce the effect of fuel-price swings.

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