UPS Announces Rates for 2005

ATLANTA--Oct. 28, 2004--UPS today announced package shipping rate adjustments and a change in the fuel surcharge that will take effect on Jan. 3, 2005.

Rates for UPS Ground, UPS Next Day Air(R), UPS 2nd Day Air(R), UPS 3 Day Select(SM) and U.S. international services will increase 2.9 percent. UPS Hundredweight Service(R), an alternative to that offered by less-than-truckload carriers, will increase by 5.9 percent, producing rates still half those of most major LTL carriers. There will be no changes to most UPS retail rates offered at nearly 3,600 locations of The UPS Store(SM).

Beginning in January, UPS will reduce the fuel surcharge currently applied to UPS Next Day Air, UPS 2nd Day Air and UPS 3 Day Select and international services by setting a maximum cap of 9.5 percent. This surcharge will continue to be calculated from an index based on the average price for a gallon of kerosene-type jet fuel.

A fuel surcharge of 2 percent on UPS Ground, UPS Ground Hundredweight and UPS Standard To Canada will be applied that will fluctuate after January based on the U.S. Energy Department's On-Highway Diesel price. The current fuel surcharge is described at UPS.com, and details regarding new calculations will be posted on the website on Dec. 1, 2004.

Other pricing changes include an increase of $0.25 for the delivery area surcharge on both residential and commercial services to more remote ZIP codes. The residential surcharge will increase $0.10 for UPS Ground services and $0.35 for UPS Next Day Air, UPS 2nd Day Air and UPS 3 Day Select. While protection against potential loss or damage is automatically provided up to $100 in value for each package, additional optional Declared Value protection will be $0.40 per $100, up to $50,000 per package, with a minimum charge of $1.20 for packages valued between $100.01 and $300.

Other changes in January extend UPS Ground service rates as an option for shipments bound for Alaska, Hawaii and Puerto Rico originating in the continental U.S.

"UPS continues to offer the best value for customers not only with package delivery but with growing capabilities for freight and global supply chain management," said Kurt Kuehn, UPS senior vice president of worldwide sales and marketing. "Over the past year, we have improved transit times, introduced new technologies for visibility and have expanded access, all while delivering more packages, on time, than anyone."

The flexibility of UPS's integrated network allows the company to adjust operations to fit changing customer needs. Recent improvements have reduced transit times by one day on UPS Ground service between 20 metropolitan areas, including Atlanta, Baltimore/Washington, D.C., Chicago, Dallas, Houston, Kansas City, Los Angeles, Philadelphia and Pittsburgh. Globally, UPS will begin six new weekly flights directly to China this year with an additional six to begin later in 2005.

With the addition of 273 new ZIP codes for UPS Next Day Air Early A.M.(R) service and 132 ZIP codes for guaranteed 10:30 a.m. delivery areas, UPS Next Day Air services offer an advantage to more than 2,000 ZIP code destinations nationwide.

Also in early 2005, the Quantum View(SM) suite of visibility services will expand the tools necessary to help manage import shipments and compliance. As UPS customers expand globally, features continue to be added to simplify international shipment processing and information access. Quantum View Data and Quantum View Manage also will offer improved visibility of incoming shipments before they arrive, enabling customers to plan their resources even more effectively.

MyUPS.com and UPS Online(R) Tools integrated into customer Internet sites will automatically reflect the new rate information in January.

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.

Except for historical information contained herein, the statements made in this release constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements, including statements regarding the intent, belief or current expectations of UPS and its management regarding the company's strategic directions, prospects and future results, involve certain risks and uncertainties. Certain factors may cause actual results to differ materially from those contained in the forward-looking statements, including economic and other conditions in the markets in which we operate, governmental regulations, our competitive environment, strikes, work stoppages and slowdowns, increases in aviation and motor fuel prices, cyclical and seasonal fluctuations in our operating results, and other risks discussed in the company's Form 10-K and other filings with the Securities and Exchange Commission, which discussions are incorporated herein by reference.