UPS announced on Friday new rates for 2004. UPS commercial ground services will increase 1.9 percent. The Wall Street Journal reported before the announcement that the planned increase was the smallest increase for ground-delivery rates in at least seven years, underscoring the heightened competition in the U.S. package-delivery industry.

UPS said its Worldwide Express services are increasing an average of 2.9 percent. The premium for packages and letters delivered to residential addresses will rise from US$1.15 to US$1.40.

UPS also will introduce a US$1.00 delivery surcharge to commercial shipments headed to more remote ZIP codes. These ZIP codes are the same as those covered by the current residential delivery area surcharge, which was first applied in 1999 and remains at US$1.75. The majority of UPS's accessorial charges stay the same.

UPS will also discontinue the fuel surcharge on UPS Ground service, while a new index will be applied to UPS Next Day Air, UPS 2nd Day Air, UPS 3 Day Select and international services to reflect their higher fuel consumption.

The new 2004 rates and fuel surcharge information will be available on UPS.com beginning Dec. 5. MyUPS.com and any UPS Online Tools integrated into customer Internet sites will automatically reflect new rate information in January.