A steep slide in volumes for United Parcel Service Inc.'s (UPS) premium domestic next-day-air service showed signs of improvement in the first quarter, although much of it stemmed from the exit of competitor Deutsche Post AG's (DPW.XE) DHL unit from the U.S. market.

Meanwhile, UPS's average revenue per package from the premium domestic service slumped nearly 14% in the quarter, compared to a 1.1% increase in the fourth quarter.

The company attributed the first-quarter pricing trend in next-day-air to lower shipping weights as customers pared back package sizes amid the poor economy, as well as to reduced fuel surcharges due to lower fuel costs.

But average daily domestic volume in the premium service was off only 0.7% in the first quarter, after sliding 8.6% in the fourth quarter and 7.1% in 2008 overall.

Still, the company said first-quarter average daily volume would have been down nearly as much as the fourth quarter's slump had it not been for customers picked up from DHL.

In November, DHL announced it would no longer offer U.S. domestic-only air and ground service as of Jan. 30. DHL still plans to offer international shipping to and from the U.S.

-By Bob Sechler, Dow Jones Newswires; 512-394-0285; bob.sechler@dowjones.com