FedEx Suspends Money-Back Guarantee

FedEx Suspends Money-Back Guarantee on US-Based Air Services for The Peak Holiday Shipping Season

As reported by FreightWaves, FedEx announced on their website that they will suspend the guarantee on nine separate air services beginning November 1, 2021, just seven months after restoring them.  The guarantees will then be restored on Jan. 16, 2022 according to FedEx. This date coincides with the expected “end of the holiday returns cycle”, which in years past brought the peak season to a close. However, the ongoing surge in delivery demand in the wake of the COVID-19 pandemic has upended traditional parcel-shipping cycles, forcing carriers to operate in what has become known as a “perpetual peak.”

FedEx Ground, the company’s ground delivery unit that will handle much of the domestic peak-season traffic, has struggled with service reliability for some time now due to the persistently increased demand and a severe labor shortage. However, there has been little discussion about the impact of increased traffic and labor shortages on the company’s air services.

FedEx reinstated the money-back guarantees on April 6, one day after rival UPS restored its guarantees on domestic next-day air services and a slew of international air offerings. UPS at that time also gave itself more latitude in its “next-afternoon” delivery schedule by extending the delivery deadline to 11:59 PM for making those deliveries and still keeping its guarantee. In the Pre-pandemic era, those deliveries were typically made around 3 p.m.

It is possible that FedEx and UPS are hedging as much as possible against demand spikes that could disrupt holiday delivery schedules. FedEx has set Dec. 15 as the cutoff date for shippers to tender parcels to its ground delivery network, which will process the lion’s share of holiday deliveries, and expect them to reach residences by Christmas Eve. For the second consecutive year, UPS will not publish a universal cutoff date for accepting ground-parcel shipments. Instead, UPS users will enter specific shipment information into a website calculator that will determine the specific cutoff date for that shipment.

Both carriers provided specific cutoff times for their expedited and air express products. The times vary depending on the service product selected. For example, parcels to be delivered by UPS in one day must be tendered no later than Dec. 23. For two-day deliveries, the deadline is Dec. 22. For three-day deliveries, the deadline is Dec. 21. Those have been UPS’ traditional cutoffs for those products, according to a company spokesman.

Unlike its time-definite products, UPS’ U.S. ground parcel service has no fixed delivery dates, though the company generally gives a range of one to five days for delivery depending on the origin and destination points. This geographic variability may make it hard for UPS to publish universal cutoff dates for peak-season ground traffic.

For those shippers expecting FedEx and UPS to reinstate their service guarantees for Ground shipments, don’t hold your breath!