The future of FedEx service guarantees and delivery policies are in flux right now. And it's important for shippers to know what's happening to leverage that information to make good business decisions.
The Future of FedEx Service Guarantees Policy
Recently, a client shared an email with us that they received from FedEx, which said guaranteed deliveries may never be reinstated.
While the wording was interesting, we got the impression that this was a tactic from the account manager. The carrier had slipped in money-back guarantee waiver language that precluded the customer from filing for guaranteed service refunds.
The previous contract did not have that waiver language in it. They were renegotiating a few terms and FedEx actually slipped the language and the customer didn't know about it.
We recommended returning to the carrier and pushing for that language to be removed. And the response from FedEx was that they didn’t think that the guarantees are going to be coming back at all. Which didn’t make any sense to us.
Why would someone choose, for example, a priority overnight service that's guaranteed to arrive by 10:30 if there's no guarantee associated with it?
And as a matter of fact, the rumblings we’ve heard are that both couriers are looking to reinstate service guarantees at some point next year, hopefully by the end of the first quarter. Whether that happens or not remains to be seen.
For this particular case, we're pretty sure it was just a tactic that the local account manager used to include that language. And the customer is going back to get that removed.
What Happens if FedEx Service Guarantees Never Come Back?
Hypothetically speaking, even if those guarantees didn’t come back, shippers can still save money and improve their contracts or rates in other ways.
The first step would be to evaluate your shipping characteristics today and move away from overnight services. If a shipment isn’t guaranteed overnight, and if it's within a one-day time in transit area by ground, you might as well just ship them by ground. They're going to get there on the same day without the guarantee on next-day anymore.
That's probably the easiest way — start shipping packages via ground rather than air. Especially if the air packages aren't guaranteed either.
The second opportunity is to open up your contract. You can tell FedEx that, for example, if you're taking away the ability to file for late service or service refunds, we’d like better rates on the services we’re using instead. Without the time-of-day guarantee and refund process, you’ll need to shift parts of your approach.
Air vs. Ground Insights
Lojistic users are uniquely suited to weather the loss of FedEx service guarantees because of a new feature within our platform called air versus ground. It's a new perspective that can really help someone in that situation determine how much money ground shipping could save them versus other services.
While we don’t expect FedEx service guarantees to be gone forever, it’s important for shippers to at least consider the possibility that they’ll never be reinstated.