Will service guarantees return in 2022?
Before 2020, service guarantees by FedEx and UPS meant money back if packages weren’t delivered as promised. Then, COVID-19 shattered “business as usual,” and everything changed. Within one day of each other, UPS and FedEx ceased all service guarantees. As deliveries became more unpredictable, shippers lost their recourse for financial reimbursement. According to the UPS website, “The Novel Coronavirus pandemic has created unprecedented complexities, which have required us to constantly reassess our operations. Our highest priority is to help ensure the health and safety of our employees, customers, and suppliers.”
Overnight, businesses could no longer rely on guaranteed deliveries (or the refunds they deserved when packages weren’t delivered on time).
A partial return
In April 2021, UPS and FedEx reinstated partial service guarantees on their more expensive shipping options. UPS also extended their guaranteed delivery time for UPS Next Day Air Saver® deliveries from 3 PM to 11:59 PM on the guaranteed day of delivery.
While a partial return was better than nothing, the new terms didn’t last long.
In October, UPS announced that it would extend delivery commitment times for UPS Next Day Air® destined to residential locations from 10:30 AM to 12:00 PM until further notice.
On November 1, FedEx suspended its Money-Back Guarantee until January 16, 2022. This leaves shippers using FedEx without an opportunity to claim refunds during the busiest time of the year. Will the guarantee return for all its services? FedEx is leaving their options open, stating “The status of the money-back guarantee for these FedEx services and additional FedEx services worldwide is being evaluated on an ongoing basis, and our focus remains on continuing to provide the best possible service to our customers during this period of uncertainty.”
What’s next for service guarantees in 2022?
In the past, UPS and FedEx took responsibility for late deliveries, service failures, and incorrect charges by offering refunds or credits. Now, service guarantees are no longer guaranteed. We’ve learned that the carrier can (and will) revoke service guarantees during times of high traffic.
Should you just accept the “new normal” and pay for unpredictable service? No! While you may not be able to force the reinstatement of service guarantees, there is something you can do.
Parcel rate contracts can be negotiated at any time– not just when the contract ends. If you negotiated the contract without the help of a shipping professional, you’re probably paying too much. The team at ShipRx has spent our careers writing contracts on both sides of the table. We’ve worked for the carriers, and we’ll coach you on the strategies that will help you save the most money.
The best part? We don’t get paid unless you’re saving money, so you’ve got nothing to lose. When you negotiate a contract with the help of ShipRx, you can be confident that you’re saving money– whether or not service guarantees make a full return in 2022.
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