In an effort to recapture volumes diverted to rivals ahead of a five-year contract with the Teamsters union, UPS Inc. (NYSE: UPS) will offer rebates to offset early-termination penalties should customers break their new contracts to return their traffic to the carrier.
UPS CEO Carol B. Tomé affirmed the policy at an analyst breakfast this week, according to those in attendance. According to Ken Hoexter, analyst at Bank of America, Tomé said the costs of the rebates would be minor and would not impact the company’s or the industry’s yield focus. There were no specifics about how widespread the rebate program would be.
