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UPS Announces Rates For 2006

Air Fuel Surcharge Index Recalibrated; Remains Capped at 12.5%

ATLANTA, Nov. 18, 2005 – UPS (NYSE: UPS) today announced new 2006 rates for most U.S. small package services, including a 3.9 percent increase in commercial ground services and a 5.5 percent rise in UPS air and international services.

The company also will reduce by 2 percent the index used to determine its air fuel surcharge, a move that will directly benefit customers as fuel prices moderate and the index pushes the air fuel surcharge below the current 12.5 percent cap. UPS is maintaining this cap despite dramatic jet fuel price increases. UPS remains the only express package delivery company to limit its surcharge to a maximum 12.5 percent in an industry where competitors currently are charging 20 percent or more.

The air fuel surcharge applies to UPS Next Day Air®, UPS 2nd Day Air® and UPS 3 Day Select^SM and international services. The surcharge index calculation for UPS Ground remains unchanged and is pegged to fluctuations in the U.S. Energy Department's On-Highway Diesel price.

Also beginning in January, UPS will enhance its premium air services to take advantage of recent improvements for speed and greater reach. UPS 2nd Day Air A.M.® guarantees will be accelerated from noon to 10:30 a.m., and Saturday deliveries now can be shipped via 2nd Day Air on Thursday. Even more ZIP codes will be available for UPS Next Day Air Early A.M.® delivery on top of this year's July expansion, extending early delivery to nearly 20,000 ZIP codes.

"UPS delivers value through continuing improvements to our integrated global network and expanded package, freight and supply chain capabilities," said Kurt Kuehn, UPS senior vice president of worldwide sales and marketing. "UPS's reputation for reliability has been confirmed in a recent survey of shippers who rated UPS the industry leader in customer service, on-time service performance, delivery performance, claims processing and refunds for late delivery, all while offering competitive pricing."*

There will be no changes to most UPS retail rates offered at more than 4,000 locations of The UPS Store®. Other pricing changes include an increase of $0.25 and $0.35, respectively, for the residential surcharge on UPS ground and air services. UPS now will charge for undeliverable packages after three delivery attempts. Proof of delivery features for Delivery Confirmation and Signature Required each will increase by $0.25 per package and Adult Signature Required will rise by $0.50.

The new rates will be posted on ups.com on Dec. 1. UPS Internet Shipping and UPS shipping applications integrated into customer systems will automatically reflect the new information when the changes take effect on Jan. 2, 2006.

UPS is the world's largest package delivery company and a global leader in supply chain services, offering an extensive range of options for synchronizing the flow of goods, information and funds. UPS's stock trades on the New York Stock Exchange (UPS) and the company can be found on the Web at UPS.com.

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* Annual Best Practice Survey, October 2005, Parcel Shipping & Distribution Magazine

• Susan Rosenberg
  404-828-6130