UPS Faces Class Action on Fuel Charges

Discussion in 'The Latest UPS Headlines' started by cheryl, Feb 5, 2010.

  1. cheryl

    cheryl I started this. Staff Member

    UPS Faces Class Action on Fuel Charges - Courthouse News Service
    A federal RICO class action claims that United Parcel Service for years has charged customers a premium to ship packages by air while actually shipping them by truck to save money on fuel and add to its bottom line. The class claims the "Air-In-Ground program" has earned UPS "hundreds of millions of dollars" in ill-gotten gains since 1995.

    Lead plaintiff Arapahoe Hyundai of Denver says that the purpose of the Air-In-Ground program is to "collect the higher price charged for air transportation while actually transporting packages more cheaply by ground."

    The class claims that UPS charges fuel surcharges for air shipping even if it ships the packages by truck.

    UPS denied the allegations and said the lawsuit is "baseless."
  2. stevetheupsguy

    stevetheupsguy sʇǝʌǝʇɥǝndsƃnʎ

    Did the pkgs actually get there before 10:30 the next morning?
  3. broncobros1

    broncobros1 New Member

    UPS only does this over the weekends...the customer is paying for a committed delivery, not how it is moved.
  4. 705red

    705red Browncafe Steward

    If there is an additional fuel surcharge on air volume and it doesnt go by plane would they not have a beef? If the customer is shipping something that can be reached by trcuk by 1030 am should UPS charge the fuel surcharge? What happens if its shipped from a suburb of Wis going to Il, that can make it by truck overight easily. Maybe thats what this suit is over.
  5. UpstateNYUPSer

    UpstateNYUPSer Very proud grandfather.

    There is a 1.5% difference between the surcharges for air and ground (6.5 and 5) as of 2/1/10. UPS does not guarantee mode of shipment for our premium products, just the delivery commit times. Can you imagine the accounting nightmare of trying to figure out which NDA went by plane and which went by truck? There are times when our planes are unable to fly and the only option is truck. Should that truckload of NDA be charged only the ground surcharge? As Steve said, as long as they get delivered on time, whether it flew or rode on a feeder should not matter.

    We all see instances where consignees choose a premium service when choosing ground will get it there on the same day. I occasionally get NDA within the same zip code (keep in mind our population is only 20,000). When I try to point this out to shippers most will thank me and then say that is what the customer wanted. I laugh along with them and thank them for adding to my pension.

    This class action is a waste of time and resources IMO.
  6. bluehdmc

    bluehdmc Well-Known Member

    Does UPS call it "Before 10:30am the quickest way we can get it there service?" or "2nd day AIR Service?"
    I would guess there is a "truth in advertising" thing here. There is also a fuel surcharge for ground service. Maybe UPS would be better going back to the "red" and "blue" designations for this service. I've actually picked up "SDAS" trailers from the railyard. I guess some lawyer needed some new idea to drum up business.
  7. bbsam

    bbsam Moderator Staff Member

    It doesn't seem to me it would be that hard to determine which NDA went by plane or truck. Aren't all packages continuously tracked from vehicle to hub to vehicle anyway? Seems only a process of integrating functions of accounting and ops. Probably for the most part only a small percentage of packages would be subject to the rate decrease anyway. Now if UPS could find another marketable service for that pricing integration, the fuel surcharge differential could be a modest selling point to the customer and still end up with a net gain.
  8. UpstateNYUPSer

    UpstateNYUPSer Very proud grandfather.

    I still contend that it is up to the shipper to use the most economical service to ensure their pkgs get there when they are needed. I have noticed that with the economic downturn more shippers are paying more attention to this as our premium volume has declined. UPS provides time-in-transit maps and, with lane enhancements, these times have decreased.

    When we receive a premium pkg from a shipper we are in essence signing a contract that we will get that pkg to its destination by the time commit. Nowhere in that contract does it specifiy mode of shipment.
  9. stevetheupsguy

    stevetheupsguy sʇǝʌǝʇɥǝndsƃnʎ

    I agree! What mode of shipment do they think a NDA pkg is going to take when they address it for 4 blocks up the road, or even the next county? Helicopter?
  10. Big Babooba

    Big Babooba Well-Known Member

    The only ones who make out in a class action suit seem to be the lawyers and Parade Magazine. I can see it now - UPS issuing millions of coupons worth 5 cents off the customer's next shipment while the lawyers laugh all the way to the bank.