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UPS raising delivery rates by up to 4.9 percent in 2013

By Lynn Adler

(Reuters) - United Parcel Service is raising net shipping rates by up to 4.9 percent in 2013, with smaller increases on air express services as it caters to customer demand for slower and cheaper shipping options.

The world's largest package delivery company also said on Friday that the slowest freight shipment rate will increase after being unchanged this year.

UPS, like No. 2 package delivery company FedEx , is viewed as an economic bellwether because of the volume of goods it handles.

Slowing global trade has pushed many customers to choose cheaper, less profitable shipping options, which pressured the company's profits in the third quarter. UPS suggested that its fourth-quarter profits would top estimates.

UPS has forecast a 10 percent jump in holiday shipments this year from last year, driven by growing e-commerce.

Average net delivery rates will increase 4.5 percent on UPS air and U.S.-originated international services, compared with 4.9 percent in 2012.

Ground deliveries will rise by a net 4.9 percent next year, matching this year's increase, the company said.

UPS next-day and 2nd day air freight rates within and between the United States, Canada and Puerto Rico will also rise 4.9 percent, down from 5.9 percent in 2012.

The air freight segment handles packages weighing 150 pounds or more, or that do not fit inside of a box.

UPS's 3-day freight rates, unchanged this year, will go up 4.9 percent next year.

"People are still looking for cost-effective options, and the 3-day option is more cost-effective than a 2nd-day option," UPS spokesman Tyre Sperling said.

The new rates take effect on December 31, UPS said.

(Reporting By Lynn Adler; editing by Carol Bishopric)

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