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January 28, 2000 9:19 AM, EST

Securities analysts sai that Federal Express Corp. made a mistake in implementing a fuel surcharge and would have been better off to increase list prices, as United Parcel Service did.

FedEx announced a surcharge of 3% on Dec. 31. On Dec. 29, UPS announced a 3.1% increase in its ground package rates (1-10, p. 3).

Bear Stearns, an investment and brokerage firm based in New York, surveyed customer reaction to the actions of both companies and found customers “more accepting” of the UPS increase.

According to Bear Stearns, “some shippers who intend to pay the fuel surcharge have even indicated that they would take the fuel surcharge back if fuel costs came down again.”

For the full story, see the Jan. 31 print edition of Transport Topics. .