UPS RAISING RATES; CATALOG BUSINESS LOOKING ELSEWHERE

                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: TUESDAY, February 4, 1992                   TAG: 9202040046
SECTION: BUSINESS                    PAGE: A-5   EDITION: METRO 
SOURCE: GEORGE KEGLEY BUSINESS EDITOR
DATELINE:                                 LENGTH: Medium
UPS RAISING RATES; CATALOG BUSINESS LOOKING ELSEWHERE
A rate increase scheduled for later this month by United Parcel Service is prompting Roanoke Valley mail order companies to shift their package delivery business to other shippers.
UPS on Feb. 24 will impose new rates that the catalog firms say will add 15 percent to the cost of shipping most of their merchandise. The new UPS rate is atop a 25 percent increase last year.
Orvis has gained "substantial savings" by switching 95 percent of its parcels from UPS to the U.S. Postal Service, said John Moticha, Orvis operations vice president.
Joan Cook, a catalog company recently moved to Salem, stands to spend $300,000 more because of the increase, its president, Harold Schwartz, said Monday. Last year's UPS rate increase cost the company an additional $700,000, he said.
"That's why I moved [the company]," he added. Leaving Florida brought it closer to its markets and saved shipping costs, he said.
Tweeds, a clothing mail order merchant, "will work within it. There's not a lot of choice," said Mark Friedmann, a spokesman in Paterson, N.J. He said Tweeds will continue to look for savings by trucking packages from Roanoke to UPS regional hubs closer to their destinations.
UPS "has no heart," Schwartz said. "They are putting a lot of catalogers out of business. We're going to attempt to find outside people" to deliver packages, "but that takes time."
The higher rates reflect increased costs of labor and operations, said Bob Kenney, a UPS spokesman at its Atlanta headquarters in Atlanta. Kenney said he has not heard a lot of complaints.
He would neither confirm nor deny a report that business lost because of the rate increase has resulted in layoffs at the UPS hub in Roanoke. But he said the recession has caused layoffs in some areas for the nationwide package company.
UPS said it is raising commercial rates - for parcels delivered between two businesses - 3.2 percent. Along with the new rates to residential addresses, the increases will average 10.7 percent, he said.
Moticha of Orvis said UPS is trying to reduce unprofitable residential deliveries. If UPS has fixed operating costs and a truck on the road, he said, he would think UPS would want a full truck.
Home Shopping Network and other catalog companies also have begun switching to the Postal Service, said Sherry Suggs, the agency's marketing manager in Roanoke.
Suggs said the Postal Service is ready for the additional packages. When its business began to grow after a UPS price increase last year, Suggs said, it began offering rate incentives to get new business. "With automation, we are putting in a lot of computerized sorting," she said.
Additional employees won't be needed, she said. The Postal Service is using larger trucks and its bulk mail centers at Greensboro, N.C., and other cities are equipped to handle more packages, she said.

by Bhavesh Jinadra by CNB