FedEx Suspends Money-Back Guarantee

In early November, delivery giant FedEx announced the suspension of its money-back guarantee for many services. "Beginning Dec. 13, 2022, through Jan. 2, 2023, the money-back guarantee will be temporarily suspended for select FedEx Express® services for U.S. domestic and U.S. export shipments," according to an announcement on the FedEx website. The suspension comes on the heels of recent rate increases from FedEx and UPS — and is sure to frustrate shippers already burdened with lower-than-expected peak season shipping volumes.

The announcement marks the third consecutive peak season suspension of FedEx's money-back guarantee, turning a pandemic-era peak season anomaly into a grim tradition for parcel shippers. Peak season suspension of money-back guarantees began during the pandemic when FedEx and other mega-carriers struggled to provide capacity for a booming e-commerce industry.

While FedEx has continued with its suspensions in the aftermath of the COVID-19 supply chain chaos, rival carrier UPS has announced that it plans to maintain its money-back guarantees for peak season deliveries, including next-day air for international and domestic shipments.

Which Services are Affected by the Suspension?

FedEx's November announcement will affect a broad range of the parcel carrier's services, including some of the most popular options available to shippers. As stated in the press release, the suspension of the money-back guarantee for these services will begin on December 13th and run through January 2nd, bridging the busy holiday shipping season. The U.S. domestic and export services that will see a suspension of the money-back guarantee are:

  • FedEx First Overnight®
  • FedEx Priority Overnight®
  • FedEx Standard Overnight®
  • FedEx First Overnight Extra Hours*
  • FedEx Priority Overnight Extra Hours*
  • FedEx Standard Overnight Extra Hours*
  • FedEx International First®
  • FedEx International Priority®
  • FedEx International Priority® Express
  • FedEx International Priority® Freight

FedEx has previously suspended money-back guarantees for the following services:

  • FedEx Express
  • FedEx Ground®
  • FedEx Freight®
  • FedEx SameDay® City
  • FedEx Office®

For shippers, the suspension of the money-back guarantee indicates higher overheads in the near future. E-commerce sales, which saw a peak season total of $213.62 billion in 2021, are especially prone to returns, the cost of which inevitably falls on shippers. Unable to recoup losses from late deliveries, shippers will likely struggle with revenues in peak season 2022.

When will the Money Back Guarantee Return?

FedEx plans to reinstate money-back guarantees for U.S. Domestic Express and Export services on Jan. 2, 2023; however, it has yet to reveal when the money-back guarantees will return for the rest of its services, including FedEx Ground, Freight, Express, City, and Office.

"The status of the money-back guarantee for these FedEx services and additional FedEx services worldwide is being evaluated on an ongoing basis." FedEx further stated, "Our focus remains on continuing to provide the best possible service to our customers during this period of uncertainty."

However, even with FedEx's suspension of their money-back guarantee, shippers have a broad range of options to improve operational efficiency and avoid costly late deliveries in peak season 2022.

In a No-Guarantees Shipping Industry, Shippers turn to Analytics for On-Time Performance

While peak season 2022 may not provide the capacity crunch of recent years, shippers still face a broad range of challenges. The persistent threat of a freight rail strike, coupled with labor issues at vital transatlantic trade hubs, has shippers desperate for allocation alternatives.

However, labor unions aren't the only workforce headache facing shippers this holiday season. Studies from early 2022 reveal that 73% of warehouse operators are struggling to find labor, leaving many shippers nervous about their ability to fulfill last-minute peak season orders this holiday season.  

Faced with labor insecurity, shippers have come to rely on companies like FedEx to provide the security they need to offer their customers competitive, affordable shipping. For many shippers, competitive delivery times are a must-have means of standing out in the $904.9 billion eCommerce industry. But without back-end security from 3PLs and carriers, shippers are left vulnerable to consumer frustrations and unmanageable supply chain crises.

With no guarantees from big logistics partners, shippers increasingly turn to innovative data strategies to gain the operational visibility and foresight they need to navigate a fraught global logistics environment. Data sets across a shipper's full range of modalities can provide invaluable insight into transportation networks, quickly revealing which areas are most ripe for innovation. With renewed investment in data tracking capabilities, shippers can discover many benefits:

  • Previously unseen opportunities for zone skipping can significantly cut travel times between dispatch and customers.
  • Real-time tracking of volume uncovers trends at crowded logistics hubs.
  • Accurate assessments of competing carriers and 3PLs will help drive cost-effectiveness in the logistics transportation network.
  • Updated performance metrics of carrier partners and 3PLs will highlight areas for rethinking and growth.

However, renewed investments in data — and the invaluable insights that come with them — are useless without effective aggregation and intuitive navigability. In a fast-paced logistics environment, shippers don't have the time, resources, or workforce to navigate endlessly complex data sets. Increasingly, shippers are turning to tech-enabled freight data providers to turn their raw data into usable metrics. Through a partnership with an innovative freight data provider, shippers can gain access to actionable insights, like:

  • Key Performance Indicators (KPIs)
  • Automated Notifications, distributed across all platforms
  • Finance Services and Intelligent Cost Allocation
  • Expert-Driven Contract Optimization

Bolstered by recent innovations in machine learning, these actionable insights can help ensure that shippers maintain their ability to provide customers with fast, effective shipping–regardless of the peak season whims of big-name carriers and 3PLs.

When Guarantees Disappear, You Need a Dependable Partner

As FedEx once again chooses to leave shippers in the lurch this holiday season, logistics professionals are searching for a partner they can trust. Intelligent Audit, a leading provider of logistics industry innovations for over 20 years, offers shippers the latest in freight audit and recovery, optimized carrier contracting, and expert-driven advisory services. With Intelligent Audit, shippers can offer their customers the stand-out peak season performance they expect.

Start a conversation with Intelligent Audit, and see what innovation can do for your business today.

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