UPS 2009 Annual Report Download - page 41

service expansion, including the connection of several cities to our new air hub in Shanghai, China. Export
volume growth was negatively impacted by declines in shipments to the U.S. from other regions in the world,
due to the slowing U.S. economy. Export volume trends weakened in the latter half of the year, due to the severe
global economic slowdown, with fourth quarter export volume increasing at a much slower rate than what has
been experienced over the last several years. Non-U.S. domestic volume increased, and was impacted by volume
growth in our domestic businesses in the Euro zone and Canada, but negatively affected by the weak economic
conditions in the United Kingdom.
Revenue Per Piece
2009 compared to 2008
Export revenue per piece decreased, largely due to the adverse impact of currency exchange rates, lower
fuel surcharge rates, and product mix, but was partially offset by base rate increases that took effect in the first
quarter of 2009. Currency-adjusted export revenue per piece declined 10.1% for 2009. Export revenue per piece
was impacted by the lower revenue per piece transborder products comprising a relatively larger portion of our
total volume, as we experienced larger volume declines on some of our longer export trade lanes with higher
yields. Domestic revenue per piece decreased, which was primarily caused by adverse currency exchange rate
fluctuations (currency-adjusted domestic revenue per piece declined 7.2% for the year), as well as the impact of
lower fuel surcharge rates. Total average revenue per piece decreased 12.1% for the year on a currency-adjusted
basis.
On January 5, 2009, we increased the base rates 6.9% for international shipments originating in the United
States (Worldwide Express, Worldwide Express Plus, UPS Worldwide Expedited and UPS International
Standard service). Rate changes for shipments originating outside the U.S. were made throughout the year and
varied by geographic market.
Export revenue per piece showed a significant improvement in the fourth quarter, as higher-yielding trade
lanes, such as Asia to Europe and Asia to North America, comprised a larger proportion of our total export
volume. Revenue per piece in the fourth quarter benefited from a weaker U.S. Dollar, but continued to be
adversely impacted by lower fuel surcharge rates.
2008 compared to 2007
Export revenue per piece increased, largely due to base rate increases, higher fuel surcharge rates, and
favorable currency exchange rates, but was adversely impacted by relatively higher growth in lower revenue per
piece transborder products and a shift away from our premium services. Domestic revenue per piece increased,
and was affected by rate increases, higher fuel surcharge rates, and favorable exchange rates. Total average
revenue per piece increased 2.7% on a currency-adjusted basis.
On December 31, 2007, we increased the base rates 6.9% for international shipments originating in the
United States (Worldwide Express, Worldwide Express Plus, UPS Worldwide Expedited and UPS International
Standard service).
Total revenue per piece declined 8.2% in the fourth quarter of 2008, primarily due to the strengthening of
the U.S. Dollar (currency-adjusted revenue per piece declined 3.0%), but was also impacted by an acceleration in
the shift away from our premium services and lower package weights.
Fuel Surcharges
On January 5, 2009 and December 31, 2007, we modified the fuel surcharge on certain U.S.-related
international air services by reducing the index used to determine the fuel surcharge by 2%. The fuel surcharges
for products originating outside the United States continue to be indexed to fuel prices in our different
international regions, depending upon where the shipment takes place. Total international fuel surcharge revenue
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