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Airline Baggage Fees Deliver Boost to UPS

Tuesday, 16 Dec 2008 | 3:57 PM ET

As holiday travelers prepare to go over the river and through the woods for the holidays, more folks are looking for ways to avoid the fees airlines charge for checking overweight or extra baggage.

A hydraulic hybrid UPS delivery truck is seen with the Philadelphia skyline in the background during a demonstration in Philadelphia, on Friday, June 23, 2006. The UPS truck uses an Environmental Protection Agency patented hydraulic hybrid technology that the EPA claims will increase fuel efficiency by 60 to 70 percent. Full hydraulic hybrid technology means that the conventional transmission and transfer case have been removed and replaced with a hydraulic drivetrain. (AP Photo/Matt Rourke)
Matt Rourke
A hydraulic hybrid UPS delivery truck is seen with the Philadelphia skyline in the background during a demonstration in Philadelphia, on Friday, June 23, 2006. The UPS truck uses an Environmental Protection Agency patented hydraulic hybrid technology that the EPA claims will increase fuel efficiency by 60 to 70 percent. Full hydraulic hybrid technology means that the conventional transmission and transfer case have been removed and replaced with a hydraulic drivetrain. (AP Photo/Matt Rourke)

United Parcel Servicesays the airline's baggage fees have been a boost for their business because in some cases consumers can save money by shipping their suitcases or holiday gifts ahead.

For example, a passenger flying from Chicago to New York, who checks one 60-pound bag on American Airlines, can expect to pay $65. But if this traveler ships the same bag through the UPS Store, using the ground service, it would cost $36.12. The cost could drop even more if the clothing is removed from the suitcase and just the belongings are shipped. That bundle could ring in as low as $28.40, the company says.

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UPS's Web site has a tool that allows consumers estimate shipping costs to see if they are better off schlepping the bags through the airport or sending them ahead. There also are tips for how to pack bundles better. (Rival FedEx also has an online shipping cost calculator.)

UPS declined estimate how much this trend has added to its business, but Steve Kwon, a UPS Store franchise owner in San Francisco, says "it's becoming more of a trend."

The parcel-delivery business can use the extra boost. The companies, which are seen as economic bellwethers, have been hurt by the economy's downturn.

After delivering a pessimistic outlook earlier this month, FedEx is expected to report its results on Thursday. Meanwhile, UPS shares were downgraded Tuesday to underperform from neutral by Merrill Lynch.

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