UPS has announced that it will maintain its Money-Back Guarantees for peak-season deliveries of Next-Day Air shipments in domestic and international commerce.
This latest move by UPS is exactly the opposite of the decision by rival FedEx which said they will suspend their money-back guarantees for peak-season deliveries of air express shipments within the U.S. and for export from the US. The FedEx suspension will be in place for the period from Dec. 13, 2022 to Jan. 2, 2023.
UPS’ Money-Back Guarantees for expedited international deliveries typically depend on the distance and the time zones separating the origin and destination points. For example, a package shipped on the evening of Nov. 29 from UPS’ main global air hub in Louisville, Kentucky, and bound for Cologne, Germany, (the carrier’s European air hub), will be guaranteed if the package arrives on Dec. 1 either by 2 p.m. or by the end of the day, depending on the air service selected.
For decades, FedEx and UPS offered money-back guarantees on late or missed deliveries for most services , as long as affected shippers could provide sufficient proof of the original service commitments. However, both carriers suspended all money-back guarantees during the spring of 2020 as pandemic-related changes in buying behavior sent delivery volumes spiking and made it impossible for the carriers to honor all of their guarantees. Both service providers subsequently reinstated their Money-Back Guarantees for Next-Day Air services. However, neither company has reinstated their Ground Service Guarantees.
Because ground deliveries are relatively low margin, the carriers have no financial incentive to restore money-back guarantees for this service, and risk relinquishing already thin profits. Over the past several years, both parcel carriers have been placing provisions in their customer contracts to eliminate any Money Back Guarantees. Many customers have taken exception to those provisions as they feel they will lose sight of the overall service they are receiving. Many are at least opting for maintaining exceptions for Next-Day Air Services, since these shipments are so much more costly.
Most industry experts don’t expect FedEx or UPS to fully restore service guarantees, partly because there is no overwhelming pressure from the market to do so. In addition, it can be costly and time-consuming for shippers to scour numerous invoices to unearth the proof the carriers generally require to issue a refund.
The good news is that Third Party Parcel Audit Service Providers (like ICC Logistics!) have the expertise to perform all of these service audits and typically only charge their customers a percentage of the actual refunds received and without any up-front costs.
Therefore, any shipper that ships a decent amount of volume should surely consider on-boarding an outsourced Parcel Auditing process to recover these lost revenues. There really is no down side to this!
to receive our FREE white papers: