FedEx Service Guarantee Basics
FedEx service guarantee agreements work similarly to those from UPS. They actually call their FedEx service guarantee clause, "The Money Back Guarantee." That means that if you ship a package with FedEx in the United States, that package comes with a guarantee. For example, if I'm shipping a package from here to New York, I want that package delivered tomorrow. I'm going to ship that out next day. It's guaranteed to get there tomorrow by a certain time. But if it doesn't arrive on time, I'm entitled to a refund for the transportation costs of the late package.
This is the way it works. If you look at a FedEx service guarantee, they will mention the word "guarantee" over 100 times. So they tell the fact that they guarantee their services. They also tell you that you are eligible or able to file for refunds if they don't meet their FedEx service guarantee.
Sophisticated Tracking Models
Now here's where things get interesting. We all know they have very sophisticated tracking models. FedEx knows when they deliver a package late. They know down to the minute when a package arrives. If it's not there tomorrow when it's scheduled to be, they know it wasn't delivered on time.
FedEx has the ability to credit me right away for that shipment. The problem is that they don't do that. First, they put the onus on me as the shipper to identify that late package. Second, I have to contact FedEx and submit or file a delivery refund for the late shipment. They don't enforce the FedEx service guarantee themselves.
I would identify that shipment by going to FedEx's tracking system on their website. This is what's usual. I would track the package to determine that it was late. So FedEx knew that they delivered the package late. But they will still invoice me for that package. This is unless I identify that package and submit a refund request. They also only give me 15 days from the scheduled delivery date to do that.
It's Your Responsibility
Some might think that FedEx is going to credit you right away for late shipments. This is one of the biggest misconceptions in the world of parcel shipping. This is not the case. It is your responsibility. So why aren't refunds credited back automatic? Well, FedEx is counting on the fact that you're not going to file for late shipments. If they were to make refund credit automatic, it would cost them hundreds of millions of dollars a year. That is why they don't enforce the FedEx service guarantee.
So, as a shipper, what can I do about it? So you have four options. The first option is to accept what it is and to do nothing when FedEx delivers a package late. That's not an option I would recommend. But what we find in our business is there a lot of shippers out there who don't want to deal with the headache. The second option is to sign a money-back guarantee waiver. That means that you waive your right to file for late shipments in exchange for something else. The usual way FedEx structures this is they offer a few extra points built into your contract. It can look a variety of ways, but it works in the best favor of FedEx.
Audit Shipments Yourself
The third option is to audit your shipments yourself. Now, for smaller shippers who don't have hundreds or thousands of packages a day, this could be an option. But for anybody that has any sort of volume, it's close to impossible. Along with each shipment on your shipping invoices, there can be a whole slew of charges. They range from the transportation charge to a variety of assets, oils, and fuel surcharge. So being able to develop technology that can account for all this isn't an easy task.
The fourth option is to outsource or delegate the auditing of your shipping invoices. This may be to a company that has built proprietary technology to handle the audit. At Lojistic, we've built a platform where you can connect your carriers and like FedEx. Our technology actually conducts an audit for free. So you can use the Lojistic technology to audit your own FedEx invoices. You'll get a list of shipments that are eligible for refunds. And then you can go to FedEx and request those credits yourself.
Lojistic Handles FedEx Service Guarantees
Another option is to actually have a company do the recovery or conduct the recovery on your behalf. So companies like Lojistic can actually audit your invoices. Then we can go to FedEx and request for those credits on your behalf. Lojistic is different because you don't need to pay to use our technology. With many of our competitors, you must be a client to use their platform technology.
How do we differentiate ourselves from our competitors? LJM, the Vera Ships, the Intelligent Audits, and the Bulldogs are all great companies. And I could sit here and tell you how our technology is so much better than their technology. Look, at the end of the day, it's auditing shipping invoices, it's not rocket science.
I'm not going to sit here and tell you our audit recovery is going to be leaps and bounds better than theirs. When it comes to us and our top competitors, the technology is on par with one another. What separates Logistic from our competitors is our culture, our environment, our people.
We Make Shipping Fun
You know, logistics is not the most exciting topic, right? But the awesome thing about Lojistic is we make shipping fun. If you walk around the office, you'll see lots of smiles, you'll see high fives, you'll see people enjoying what they do. And what that translates to is happy employees translates to happy customers. Recently, we wrapped up a very large project for a very big shipper. And what did we do? We went and celebrated last Friday. We closed the offices down at 3:30 p.m. and went and had drinks as a company. You know, that's what we do here. We make shipping fun.
So how do you get started with Lojistic? I'm not asking for you to sign up for any of our services, I'm not asking you to take my word. All you need to do is go to our website, lojistic.com, and create your own account. You can then connect your carriers. You can see and experience for yourself what it's like to be a Lojistic customer. We obsess over helping companies save money on shipping and reduce shipping costs. You can get a feel for that when you create an account. Right away, you can see cost savings opportunities the platform identifies for you.